Company Profile

Jiangsu Zeyu Intelligent Electric Power Co Ltd is a China-based company principally engaged in the provision of overall solutions for power information systems, including power design, system integration, as well as engineering construction, operation and maintenance.

Power design business includes grid consulting and design business, and distribution network consulting and design business.

System integration business mainly includes power communication system integration, power dispatching data integration, and substation operation and maintenance monitoring system integration.

Engineering construction, operation and maintenance business includes communications engineering construction, power engineering construction, power distribution automation construction, customized operation and maintenance services, network optimization services, customer training and promotion services, among others. The Company operates its businesses in the domestic market.

(source: MarketScreener)

Investment Highlights

Jiangsu Zeyu Intelligent Electric Power Co Ltd (“Zeyu”/ the company) is a one-stop intelligent grid comprehensive services provider engaging in the provision of overall solutions for power information systems, including power consulting and design, system integration, and engineering construction, and operation and maintenance.

Since its inception in 2011, Zeyu has been specializing in grid informatization and working hard in Jiangsu Province. It has participated in the construction of multiple projects including power design, system integration, construction, and operation and maintenance within Jiangsu, with more than 50% of the power communication network in Jiangsu completed, bringing it good reputation and influence, and its high-quality services have been recognized by customers for long.

Based itself in Jiangsu Province, Zeyu has actively made its presence outside of Jiangsu.

Its experience in grid construction, and operation and maintenance in Jiangsu is the company’s crucial competitiveness to expand grid business in other provinces.

In 2017, the company established subsidiaries in Beijing and Anhui to further its nationwide business rollouts.

Its revenue in Jiangsu accounted for 47.23% in 2022, 19.76% in Anhui, 19.36% in Beijing, 5.07% in Fujian and 4.49% in Shanghai, showing its business expansion outside of Jiangsu grew rapidly.

The intelligent inspection robot business and new energy business have become　the company’s new business focus.

The company is currently expanding its application integration project, covering intelligent inspection, testing, operation and maintenance, and control and etc.

As the production capacity will be put into use one after another, and based on its conventional competitiveness in network integration, the company’s application integration project will beef up its efforts.

Meanwhile, the company has actively rolled out business in new energy, involving the development, investment, design, construction, operation and service of distribution PV stations, which is expected to grow into its second growth curve.

Earnings forecast and investment recommendation

Zeyu specializes in power informatization, works hard in Jiangsu, and actively rolls out business outside of Jiangsu Province. In the meantime, it also stepped up its efforts to develop intelligent inspection robot products.

Its EPS is expected to achieve CNY 1.26 in 2023, CNY 1.70 in 2024, and CNY 2.13 IN 2025, implying a P/E ratio of 26.3x, 19.5x, and 15.6x, respectively. We give it an “Outperform” rating with the first coverage.

Potential risks

weaker-than-expected policy effects; less-than-expected downstream demand; a continuous rise in raw material prices; macroeconomic swings