A leading optical storage inverter company, focusing on overseas optical storage markets. The company's main products include grid-connected inverters, energy storage inverters, household systems, energy storage batteries, etc. In 2023, we achieved revenue of 7.353 billion yuan, an increase of 56.10% year on year; net profit to mother was 852 million yuan, an increase of 31.24% year on year. Europe is the company's largest sales market. In 2023, the European market revenue for inverters and energy storage batteries was 3.344 billion yuan, with a gross profit margin of 45.42%.

The elimination of inverter inventories is nearing its end, actively improving the product matrix and developing overseas markets. In April 2024, China exported 295 million US dollars of inverters to Europe, a year-on-year decrease of 49.94% and a year-on-month increase of 23.07%. As the European Energy Efficiency Directive for Buildings comes into effect, promoting the adoption of rooftop photovoltaics, household demand will be further released. In 2023, the company released the UT series 320 kW high power/GT series 100-125 kW grid-connected inverters, which are used in terrestrial power plants/industrial and commercial scenarios respectively, which are expected to bring new business growth. According to the company's official website data, as of May 2024, the company has installed 71.2 GW of this product globally and sold well in over 100 countries and regions.

The European household storage machine market is concentrated, and the company's new products meet the needs of industrial and commercial storage. According to data from the Chaoden Think Tank, Europe added about 9.5 GWh of new household storage capacity in 2023, an increase of 60% over the previous year, accounting for 59.01% of the world. Furthermore, according to data consulting data from the Dadong Era, European industry and commerce only accounted for 4% of new energy storage installations in 2023, which has the potential for market growth. In 2023, EAC series 60kWh and BAC series 100-372kWh outdoor integrated energy storage cabinets will be launched, which are used in industrial and commercial scenarios. According to SNE Research, global energy storage battery shipments in 2023 were 185 GWh, an increase of 53% year over year. Among them, European shipments were 23 GWh, +156% year over year.

Profit forecasting and investment advice. The company's EPS for 24-26 is estimated to be 4.83/5.72/7.16 yuan/share, respectively. Considering inventory removal, new product iteration, and the decline in energy storage cell prices, it is expected that demand for optical storage will be further released. Referring to comparable company valuations, we think it is appropriate to give the company a 24-year 22 PE valuation, corresponding to a reasonable value of 106.30 yuan/share, and give a “buy” rating.

Risk warning. Industry policies fall short of expectations; raw material prices fluctuate; market competition intensifies.