For listed companies, performance is often the best litmus test. After the earnings season, if you want to break down the sectors in the capital market where fundamentals have reached an inflection point, of course, the energy storage industry cannot be ignored. According to Tonghuashun iFind data, more than 80% of energy storage-related concept stocks were profitable in the first quarter of this year.

Looking further, the performance of many relevant companies in the energy storage segment has clearly picked up. Take portable energy storage as an example. Since 2024, thanks to the accumulation of multiple positive factors, the financial report of Huabao Xinneng (301327.SZ), a representative company in the portable energy storage industry, has sent a strong signal of value. According to the company's quarterly report, Huabao Xinneng achieved revenue of 582 million yuan in the first quarter, a sharp increase of 29.89% over the previous year; net profit to mother was 28.9997 million yuan, successfully turning a loss into a profit.

As a “veteran” in the industry, Huabao Xinneng has long accumulated a deep competitive advantage in the field of portable energy storage. Earlier this month, Huabao Xinneng also reached a new milestone — the company's flagship product, the “Electric Small 2” outdoor power supply, sold more than 4 million units worldwide.

As Huabao Xinneng's operations continued to improve steadily and its performance ushered in an upward inflection point, the company's market performance gradually improved. The Zhitong Finance App noticed that recently, the company has received intensive research from many well-known institutions in the market, and several other brokerage firms have published research reports that are all optimistic about Huabao Xinneng's growth prospects; in terms of stock price trends, Huabao Xinneng's stock price has now also entered a strong operating channel, and the current price has rebounded nearly 40% from its low point during the year.

Positive factors accumulate performance and turn upward

Huabao Xinneng, founded in 2011, has grown into a global leader in portable energy storage after nearly ten years of development since entering the field of portable energy storage in 2015. Looking back on track record, in 2019-2022, Huabao Xinneng's revenue and net profit compound annual growth rates reached 116% and 99% respectively, and the company's core financial data maintained a strong growth trend.

The clock is set to 2023. Against the backdrop of the industry's supply and demand dilemma, the entire portable energy storage market is under great pressure. During the industry adjustment period, the performance of even leading portable energy storage companies was briefly affected.

If the theme word for the 2023 industry is adjustment and stress testing, then portable energy storage companies that have “picked up” the challenge this year can be said to have officially reached an inflection point.

First of all, as far as the industry environment is concerned, as expectations for interest rate cuts from the Federal Reserve strengthen, and inventories in the European market continue to disappear, global demand for portable energy storage is expected to recover smoothly; on the supply side, against the backdrop of a tightening market financing environment, the competitive strategies of new entrants in some industries are expected to shrink, and the portable energy storage industry will usher in an inflection point in the industry from both supply and demand sides.

As far as individual stocks are concerned, the industry leader Huabao Xinneng achieved a relatively rapid increase in operating income and net profit in the first quarter thanks to the continuous improvement of global brand strength and product competitiveness, as well as the results achieved in reducing internal costs and increasing efficiency.

By market, Huabao Xinneng achieved a 36.67% year-on-year increase in revenue in the US market and a 74.84% year-on-year increase in revenue in the Japanese market during the period. In terms of channels, Huabao Xinneng's independent website and offline KA channels continued to expand. By the end of the first quarter, the company had established 21 independent websites around the world, covering 40 countries and regions. At the same time, in close cooperation with well-known global brands or retailers, the company's products have successfully entered nearly 10,000 world-renowned retail channels such as Costco, Harbor Freight Tools, and Walmart.

As far as the profit situation is concerned, Huabao Xinneng's profitability improved rapidly in the first quarter due to various factors such as the clearance of high-price inventory in the early period, optimization of the company's product structure, and an increase in the share of new product sales. The company's gross margin increased 4.83 pct to 46.52% year-on-year during the period.

Multi-point layout boosts high growth

Looking back at Huabao Xinneng's business history, the company's rapid growth is inseparable from the booming development of the entire portable energy storage industry. However, judging from the current state of the industry, the penetration rate of portable energy storage products from a global perspective is still low, and there is still room for significant improvement in the future. According to third-party agency forecasts, in the future, in the context of the continued release of demand for new application scenarios, the global portable energy storage market space is expected to exceed 25 billion US dollars by 2026, corresponding to a compound annual growth rate of 38.8% from 2023-2026.

There is plenty of snow in the industry, and Huabao Xinneng, which has a stable leading position, is expected to continue leading the way in the next stage.

First, from a product perspective, as a company with the “genes” of technology and innovation, Huabao Xinneng has continued to work to broaden the technical moat of products over the years and continuously promote the iterative upgrading of products. Taking the first quarter as an example, the company's R&D investment reached 403.183,000 yuan during the period, accounting for 6.92%. Continued R&D investment ensured the company's leading position in R&D innovation and product development technology.

The latest example is that in 2023, Huabao Xinneng successfully launched the first generation of fixed home storage products to achieve integration from photovoltaic power generation to electrochemical energy storage, which also marks a further improvement in the company's product matrix. According to information, fixed home storage is currently on the market in the US. DIY household energy storage is expected to be launched this year and will be launched in Europe. What can be expected next is that household energy storage products will open up broad space for the company to grow.

At the same time, Huabao Xinneng's new channel expansion results are also showing at an accelerated pace. On the basis of consolidating the position of online sales platforms such as Amazon, Huabao Xinneng's offline channels have also made great strides. According to the data, by the end of 2023, the share of revenue generated by the company's offline sales had risen to 25.9%, a steady increase over previous years. In the next 2-3 years, Huabao Xinneng will continue to take offline channel development as a key strategic goal, and will continue to focus on the two core markets of the US and Japan. While pursuing an increase in the number of offline channels, it will also pay more attention to improving the sales conversion rate of products after entering stores.

Meanwhile, in terms of emerging markets, Huabao Xinneng is continuously investing resources to cultivate markets such as China, Southeast Asia, and Latin America to explore incremental opportunities. In 2023, Huabao Xinneng's revenue from domestic sources increased by 7.27% to 203 million yuan, accounting for 8.76% of revenue. Even in a challenging market environment, it has shown strong operational resilience and growth elasticity. Looking ahead, as the company's business in emerging markets gradually gained momentum, it might be able to bring about a considerable increase in performance for Huabao Xinneng.

The fundamental inflection point has been reached, and at the same time, there is plenty of momentum for growth. No wonder Huabao Xinneng has recently received intensive research from the agency. The Zhitong Finance App learned that on April 28, Huabao Xinneng was surveyed by a number of well-known institutions, including Juming Investment. Coincidentally, since the end of April, many brokerage firms, including Huafu Securities, Western Securities, Great Wall Guorui Securities, China Merchants Securities, and GF Securities, have been intensively disclosing research reports, and they are all optimistic about Huabao's new energy. Based on the above signs, what can be expected is that as the company's performance returns to a rapid growth channel, the investment value of Huabao Xinneng is expected to be re-evaluated.