Recommended logic: 1) domestic high-power optical storage inverter leading enterprises, the development has entered a new stage, vivid energy is abundant, 23H1 achieved revenue of 2.17 billion yuan, an increase of 416.6% over the same period last year; net profit of 140 million yuan, an increase of 488.6% over the same period last year; 2) centralized inverter started, the company's technical strength is outstanding, the technology cognate expanded to energy storage PCS business, energy storage PCS gross profit margin remained stable compared with the same period last year. 3) the overseas market can be expected in the future. 2023H1's overseas income is 220 million yuan, accounting for only 10.2% of the revenue. The profit after the expense is expected to be released gradually.

The optical storage business has grown significantly, and the results of multi-dimensional layout have been achieved. With the gradual increase of policy and the rapid growth of energy storage demand, the large-scale use of renewable energy has become a basic trend due to the accelerated transformation of the global energy system to low carbon. 2023Q2 achieved an income of 1.557 billion yuan, an increase of 665.6% over the same period last year, an increase of 151% over the same period last year. The net profit returned to its mother was 100 million yuan, a significant increase compared with the previous month. The acceleration of the domestic optical storage business led to a high performance, at the same time, the net interest rate increased, and the scale effect gradually appeared.

Centralized inverter starts to expand the business of energy storage converter. The company integrates Emerson resources and carries out complex mountain and water surface power station projects. Typical cases include large-scale ground power station of Heilongjiang 1.05GW National Optical Storage demonstration Base, Guizhou Qianxi 200MW offshore photovoltaic power station, etc., with outstanding technical strength. There are some similarities in the technical path between the energy storage converter and the photovoltaic inverter. The main difference lies in that the energy storage converter is bi-directional and the photovoltaic inverter is a unidirectional device. In terms of difficulty, the technical barrier of centralized distributed inverter is obviously higher than that of energy storage converter and series inverter. The company grasps the high growth rate of energy storage development, and expands the energy storage production line three times after listing. It is estimated that the energy storage capacity will be 0.65/5.65GW for 23 months and 24 years.

Overseas business is progressing smoothly and is expected to continue the trend of global expansion. In 2023, the company focuses on exploring and expanding the North American and European markets, while seizing the opportunity of the rapid development of the global optical storage market, setting up sales companies in Europe, the Middle East and India, and gradually establishing a global sales and service network; at present, the world has eight major marketing centers. ground photovoltaic power stations are applied to India, Southeast Asia, the Middle East, Europe and other places, large-scale energy storage projects are applied to the United Kingdom, the United States and other places. In the future, we may continue to maintain the dominant share of market segments, including the market development of large energy storage power stations dominated by the North American market, the distributed photovoltaic and household storage markets in Europe, and so on.

2023H1's share of overseas revenue is far lower than that of its peers (Sunshine Jinlang accounts for 40% to 60% of overseas revenue). There is plenty of potential for improvement in the future, with fees ahead and profits gradually released.

Profit forecast and investment advice. It is estimated that the operating income of the company from 2023 to 2025 is 55.3,80.2 and 11.62 billion yuan respectively, the net profit is 4.8,7.2 and 990 million yuan respectively, the EPS is 1.35,2.01,2.76 yuan respectively, and the corresponding PE is 22,15 and 11x respectively. Considering that as the leader of inverter in ground power station, the company extends its technology to energy storage converter and system integration business, actively develops overseas distributed photovoltaic market and household storage territory, and has strong performance realization ability in the future. in summary, considering the growth of the company, we give 2024 22 times PE, target price 44.22 yuan, coverage for the first time, give "buy" rating.

Risk tips: market competition risk; raw material cost rise risk; company profitability decline risk; fund-raising project construction and production schedule is not as expected risk; exchange rate fluctuation risk.