T-dry ab le to S-pressure um shows that multi-application scenarios have strong power generation support for 23 years, and the cumulative installed capacity of wind power is expected to reach 430GW, which is + 17.7% compared with the same period last year. As the main equipment of wind power system, dry transformer is expected to benefit simultaneously. In addition, "dry change + box change" and "dry change + offshore" are more economical, which are conducive to reducing the cost of wind turbines, and the permeability is expected to rise. In the field of photovoltaic, the company focuses on the production of upstream reduction furnace and downstream distributed photovoltaic transformers, and actively expands the EPC business of photovoltaic power stations in 2022, and has signed four contracts. In addition, the rail transportation industry has a CAGR of nearly 20% from 2011 to 2020, and the market demand for dry change of rail transportation continues to be strong. As one of the main suppliers of high voltage frequency converter in China, the market scale of phase shift transformer is expected to reach 920 million yuan in 2025.

Based on technical homology and customer cooperation, the company strives to create the second growth curve of energy storage. Based on the medium and low pressure energy storage system, the company launched the 35kV high-pressure Fed energy system in July 22. The integrated scheme has the advantages of high efficiency and low cost, and the market share is expected to increase to 25% in 2025, and the market size will reach 23.02 billion yuan. The company's energy storage products and existing business have technology and customer cooperation to build an industrial moat. In September 22, the company issued 980 million yuan of convertible bonds to increase production capacity, of which Guilin and Wuhan energy storage projects are expected to reach full production in 2027, when the production capacity will reach 3.9GWh. By May 2023, energy storage orders have reached 600 million yuan (including tax). Superimposed energy storage projects have landed quickly and are expected to contribute revenue in the short term.

Digital transformation can increase efficiency internally, and the output of digital EPC digital factory is an important direction for the transformation and upgrading of the manufacturing industry. The market size of the software side-industrial Internet is expected to reach 5.8 trillion yuan in 2025. At present, the company has formed seven digital subdivision businesses and provides digital services "from the inside to the outside". By 2023, the company's three major bases in Haikou, Guilin and Wuhan will build or upgrade 9 digital plants to increase the number of capacity / output / inventory turnover and help reduce costs and increase efficiency. In addition, in 2021, we will set up wholly-owned subsidiaries Hainan Tongshang and Wuhan Jinzhi to carry out digital factory business. As of 2023, H1 has cumulatively accepted more than 400 million yuan of business orders for the overall solution of the digital plant.

Investment suggestion: we expect the company to achieve operating income of 7.68 billion yuan / 11.03 billion yuan / 15.47 billion yuan from 2023 to 2025, an increase of 61.9% over the same period last year, with a year-on-year increase of 43.5% and 40.3%. The net profit of returning to the mother is 520 million yuan / 850 million yuan / 1.26 billion yuan, corresponding to the PE of 25-15-10. Cover for the first time, giving a "buy" rating.