Event: the company released the "2022 semi-annual report".

The revenue side hit an all-time high and the cost side suffered resulting in lower-than-expected profits. In the first half of 2022, the company achieved revenue of 558 million yuan (year-on-year + 59.09%) and homed net profit of-7 million yuan (year-on-year-111.84%). From a single quarter, the performance of the second quarter improved significantly, with revenue of 434 million yuan (+ 89.26%) in the second quarter alone, an increase of 250% over the previous quarter, and a net profit of 25 million yuan. However, due to the adverse effects of repeated epidemic, poor supply chain and rising raw materials, the company's profit is lower than expected, but it has been obviously repaired quarter by quarter.

Various businesses are carried out as scheduled, revenue growth is eye-catching, and the profit side is expected to improve significantly in the second half of the year. From the perspective of business structure, the company's confirmed income of lithium power equipment in the first half of the year was 436 million yuan (+ 45.11% compared with the same period last year), and the growth was mainly driven by the delivery of chemical production lines, while in the first half of the year, due to the epidemic situation affecting the pace of customer production line construction and the delivery of testing equipment, it is expected that the construction of production lines will accelerate in the second half of the year, and the delivery of related equipment will increase. In terms of testing services, the company achieved 52 million yuan in revenue in the first half of the year (+ 55.95% compared with the same period last year). In addition, the company has completed the acquisition of 40% minority interests in Xingyun testing, achieving 100% holding, continued business growth and increased shareholdings. Testing services are expected to contribute significant performance increments. Other businesses are mainly composed of energy storage (PCS, charging piles, optical storage and overcharging stations), with a revenue of 67 million yuan (year-on-year + 299.74%) in the first half of the year, with a rapid expansion, and is expected to create a new growth pole in the field of energy storage + overcharging. At present, the business of the company is developing well, and it is expected that after the negative factors are resolved in the first half of the year, profitability is expected to be repaired.

Iterative battery technology brings the opportunity to reshape the charging network, and the United Ningde era launched "Optical Storage, charging and Inspection".

The new generation of overcharging station products will jointly optimize the service market experience after the use of electricity. At present, the charging station industry has ushered in an important inflection point with overcharging as the next generation trend: in terms of the total amount, with the rapid increase of electric vehicle permeability, there is still much room for improvement in the matching rate of charging piles, driving the rapid growth of industry demand. From the perspective of structure, with the overall transformation of the 800V high-voltage platform, the demand for overcharging has increased greatly, while the current mainstream power of charging stations is below 75kw, so it is difficult to give full play to the charging performance of high-rate batteries. Overcharging stations (charging power above 200kw) usher in a new round of development opportunities, high-rate battery + overcharging technology is expected to greatly improve the charging experience, and the development of overcharging technology will also transform the existing charging network. Since 2021, the company has been working with Ningde era to promote the construction of a new generation of "optical storage, charging and inspection" overcharging stations, matching nebula high-power DC charging piles and high-precision energy storage converters. Recently, this model has been accelerated in major cities in China. In line with Ningde power service strategy, matching the energy storage race is expected to be promoted on a large scale.

Profit forecast: the company is expected to achieve a net profit of 1.51 billion yuan from 2022 to 2024, corresponding to a PE of 54.1, 32.0 and 22.6 times, maintaining a "buy" rating.

Risk hint: the development of the new energy vehicle industry is not as expected; the competition in the industry is intensified.