Financial Union News on October 25th (Reporter Liu Yue): Business volume growth driving force, private electrical equipment leader Sieyuan Electric (002028.SZ) achieved steady growth in net profit in the first three quarters, with Q3 revenue and net profit doubling year-on-year. The company indicated during an institutional research in September that the contribution of overseas business to the company's total business volume will continue to increase.

Sieyuan Electric's third-quarter report released in the evening showed that the company's revenue for the first three quarters was 10.407 billion yuan, a year-on-year increase of 21.28%; net profit attributable to the mother was 1.491 billion yuan, a year-on-year increase of 29.88%.

Looking at the performance for each quarter, in the first three quarters of this year, the company's performance steadily increased, with net profits of 0.363 billion yuan, 0.524 billion yuan, and 6.04 billion yuan in Q1-Q3 respectively. Sieyuan Electric achieved year-on-year double-digit growth in Q3 revenue and net income, with increases of 29.39% and 34.95% respectively.

In the announcement, Sieyuan Electric stated that the revenue growth was due to an increase in business volume, but did not disclose specific order numbers. In fact, the company exceeded its orders last year and aims to maintain high growth in orders this year. In 2023, the company added orders of 16.513 billion yuan, exceeding the target of 15.8 billion yuan; the company's order target for 2024 is 20.6 billion yuan, a 25% year-on-year increase.

The rapid growth of overseas orders may be the backbone of the company's order target. The financial report shows that in H1 2024, overseas business achieved revenue of 1.51 billion yuan, a 40.0% year-on-year increase; with a gross margin of 33.8%, a 1.5 percentage point increase. Sieyuan Electric indicated during an institutional research in September that based on recent performance, the company's order growth rate in overseas markets is mostly higher than in domestic markets; the overall scale and growth potential of overseas markets are broad. With the company's continuous expansion in overseas markets, the contribution of overseas business to the company's total business volume is expected to continue to increase, and the growth rate is expected to be higher than the company's average level.

As a leading private electrical equipment company, Sieyuan Electric's product range covers primary and secondary equipment such as high-voltage switches, transformers, reactive power compensation, and protection and monitoring. The company has been expanding into overseas markets since 2009, with export business covering more than 100 countries and regions, and establishing subsidiaries or joint ventures in countries such as Brazil, Mexico, Switzerland, Kenya, etc.

To hedge against exchange rate fluctuation risks, the company conducts forex hedging transactions. The announcement shows that due to the impact of exchange rates on the fair value of forward forex contracts, the fair value change income in the first three quarters was 14.0468 million yuan. Sieyuan Electric previously stated on an interactive platform that the company's functional currency is the Chinese yuan, and the settlement currencies for overseas orders include the US dollar, euro, yuan, and local currencies.

Tonight, sieyuan electric also disclosed the investment plan of its subsidiary. Its subsidiary, Jiangsu Sieyuan High Voltage, plans to invest 0.3 billion yuan to build the high-voltage Asia vets (GIS) smart combination electrical equipment production base construction project. The company stated that this investment will help support the business development of the high-voltage combination electrical equipment market, meet future delivery capacity needs, and achieve new breakthroughs in sales revenue.