The Zhitong Finance App learned that CICC released a research report stating that it covered Weisheng Holdings (03393) for the first time and gave it an outperforming industry rating. The company's EPS for 24-25 is 0.74/0.92 yuan, respectively, and the CAGR is 32%. With a target price of HK$8, the company is a leading enterprise in the field of energy metering and energy efficiency management. The market mainly focuses on the situation of electricity meters going overseas. The bank is optimistic that the company's overseas channel base and brand recognition will support the company's diversified business overseas and open up room for growth.

The main views of CICC are as follows:

Comprehensive technical capabilities to provide overall solutions for energy metering and energy efficiency management.

Weisheng Holdings focuses on the three major business scenarios of energy metering, power distribution, and energy storage, and comprehensively covers “cloud network edge end” technology. Compared with peers, the integrated competitiveness of “chip+Internet of Things+digitalization” is outstanding. Taking energy metering as an example, Weisheng Holdings is the only professional manufacturer in China that can simultaneously provide various advanced energy metering products, systems and services for electricity, water, gas, and heat; it is also one of the few manufacturers with the ability to provide digital solutions from underlying chip design, data perception, edge computing, to communication technology to ensure high-speed data transmission and stable connections, and to provide users with software management.

Overseas channels+product diversification is accelerating, and there is broad room for growth.

The company has been deeply involved overseas for many years, leading the localization layout, and has four major overseas production bases in Brazil, Tanzania, Mexico and Hungary. Between 2019 and 2023, the company's overseas revenue CAGR reached 66%, and 1H24's overseas revenue share reached 28%. Looking ahead, at the industry level, the bank is optimistic about the power infrastructure upgrade space in emerging markets. At the company level, the bank is optimistic about the company's advantages in terms of technology, brand and performance accumulation, cost performance ratio, etc., as well as diversified strategic ideas: 1) channel side, with existing bases, radiating neighboring countries, and actively preparing new production capacity construction (Saudi Arabia and Indonesia); 2) expanding from electricity meters to diverse business scenarios such as power IoT, urban IoT, power distribution equipment, and energy storage.

Domestic intranet+off-network markets work together.

The bank expects that, driven by the replacement cycle and technology iteration, the average annual tender volume of the State Grid will be only 8,000 to 90 million between 2024 and 2028. At the same time, the company is strengthening its efforts to develop off-grid markets such as communications, industry and commerce, and the domestic power AMI business is expected to remain steady; benefiting from the accelerated application of dual-mode technology in power metering, radio distribution areas, etc., the domestic communication and fluid AMI business will also maintain rapid growth; the domestic ADO business, the network side will benefit from a moderate recovery in distribution network investment, and the continuous increase in the company's product range and provincial network coverage. Optimistic about business opportunities in the data center sector, the company has major customers in industries such as Ali and Byte.

Potential catalysts: Overseas production capacity and order delivery have accelerated, and domestic meter tenders have exceeded expectations.