This report is read as follows:

The company gradually strips off the traditional main business, turns losses into profits by virtue of the rapid growth of charging pile business, and actively develops energy storage microgrid business to seek accelerated development.

Main points of investment:

Maintain the overweight rating: as the expense rate remains at a high level, we downgrade the company's EPS in 2023-2024 to 0.11,05,0.33 (- 0.08) yuan, and it is estimated that the EPS will be 0.67 yuan in 2025. The company reversed its losses in 2023, so with reference to the comparable company's average valuation of 26 times PE in 2024, and considering that the company's newly developed energy storage business is expected to expand rapidly, the company will be given 30 times PE in 2024, lowering the target price to 9.9 yuan (- 1.58) yuan and maintaining an overweight rating.

The performance is in line with expectations: the company's 2023H1 realized net profit of 3.5967 million yuan, deducting non-return net profit of 1.6154 million yuan, of which 2023Q2 realized net profit of 4.2924 million yuan and deducted non-return net profit of 3.8364 million yuan.

Thanks to the outbreak of global demand, the charging pile business is growing rapidly. We expect the revenue of the company's 2023H1 charging pile business to exceed 200 million yuan, and the annual revenue is expected to reach 700 million yuan. Under the guidance of the policy, the demand in the domestic market ushered in a substantial growth, and the city put into production and put into production customers will help the company to accelerate the development of charging pile business. In addition, the company is actively exploring overseas markets, and the mainstream products have been certified, forming a strategic layout based on Europe and developing markets in Japan, Australia, the Middle East and Southeast Asia at the same time. In terms of product structure, the company mainly promotes charging stack products, which can significantly improve the power utilization and operation efficiency of the station, has obvious competitive advantages, and can ensure a relatively stable profit level.

Actively develop energy storage microgrid business. The company already has 64kWh and 215kWh energy storage products, the company is expected to rely on the customer advantage of charging piles to quickly open the industrial and commercial energy storage market, we expect annual revenue is expected to reach 200 million yuan, contributing to incremental performance.

Risk hint: the growth rate of new energy vehicles is not as fast as expected, competition intensifies and so on.