Matters:
On July 30, Shenghong Co., Ltd. announced its performance report. In the first half of 2024, it achieved revenue of 1.43 billion yuan, +30% year-on-year, and realized net profit of 0.181 billion yuan, or +0.02% year-on-year. The first half of 2024 achieved a gross profit margin of 39.6%, a year-on-year ratio of -2pct, a net profit margin of 12.5%, and -3.9pct year-on-year. Among them, the company achieved revenue of 0.832 billion in 2024Q2, +27.1% YoY, +38.8% month-on-month, realized net profit of 0.115 billion, -3.1% YoY, +73.6% month-on-month, Q2 achieved gross profit margin of 39.6%, -1.3pct YoY, and +0.05pct month-on-month, achieving net profit margins of 13.6%, -4.5pct YoY, and +2.7pct month-on-month.
Guoxin Telecom's new opinion: 1) The company is benefiting from the global energy storage installation boom. The company's energy storage business revenue in the first half of the year was 0.46 billion yuan, +20% year over year, and 30% gross profit margin, -5.6 pct year on year. Since this year, energy storage installed capacity in overseas markets has begun to recover. Demand for inverters has begun to resume growth, and product prices have also stopped falling and stabilized. According to US Energy Administration (EIA) data, the cumulative installed capacity of the US in January-June was 4.23 GW, +136% year over year. EIA estimates that in the context of the peak installation season in the US in June, it is expected to achieve 3.09 GW of installed capacity, +192% YoY, +188%. On the domestic side, demand for installed energy storage continues to grow at a high rate. According to Polaris Energy Storage Network data, the tender capacity for domestic energy storage system projects from January to June 2024 was 41.1 GWh. With a year-on-year increase of +27%, the company is expected to continue to benefit.
2) The company's charging pile business is developing rapidly. The company's charging pile business achieved revenue of 0.56 billion yuan in the first half of the year, +45% year over year, gross profit margin of 38.1%, and -1.4 pct year on year. According to data from the China Charging Alliance, as of June 2024, the number of domestic public charging stations was 3.122 million, and the increase in domestic public charging stations in the first half of 2024 was 0.34 million, +9.5% over the same period last year. Overseas, as of June 2024, the 27 EU countries had 0.733 million public charging stations, and the number of new public charging stations added was 0.1 million in the first half of 2024, +3%; as of the end of June, the number of public charging stations in the US was 0.178 million, and the number added in the first half of 2024 was 0.018 million. The company continues to explore overseas markets for charging piles, and is expected to maintain performance growth.
3) The industrial power supply business is developing steadily. The company's industrial power supply business achieved revenue of 0.25 billion yuan in the first half of the year, +17% year over year, gross profit margin of 54.7%, and +1.1 pct year over year. Benefiting from the rapid development of the domestic high-end equipment manufacturing industry and the steady growth of the photovoltaic industry, the company's business is expected to continue to improve.
4) Investment advice: Lower the profit forecast and maintain a rating superior to the market. We expect net profit for 2024-2026 to be 0.434/0.549/0.653 billion yuan (the original forecast was 0.523/0.676 billion yuan for 24-25), with year-on-year growth rates of 8%/26%/19%, respectively, and PE valuation of 15.8/12.5/10.5 times. Maintaining an superior market rating.
5) Risk warning: Prices of upstream raw materials have risen sharply; competition in the charging pile industry has intensified; downstream demand for energy storage falls short of expectations.
Commentary:
On July 30, Shenghong Co., Ltd. announced its performance report. In the first half of 2024, it achieved revenue of 1.43 billion yuan, +30% year-on-year, and realized net profit of 0.181 billion yuan, or +0.02% year-on-year. The first half of 2024 achieved a gross profit margin of 39.6%, a year-on-year ratio of -2pct, a net profit margin of 12.5%, and -3.9pct year-on-year. Among them, the company achieved revenue of 0.832 billion in 2024Q2, +27.1% YoY, +38.8% month-on-month, realized net profit of 0.115 billion, -3.1% YoY, +73.6% month-on-month, Q2 achieved gross profit margin of 39.6%, -1.3pct YoY, and +0.05pct month-on-month, achieving net profit margins of 13.6%, -4.5pct YoY, and +2.7pct month-on-month.
The company is benefiting from the global energy storage installation boom.
The company's energy storage business revenue in the first half of the year was 0.46 billion yuan, +20% year over year, and 30% gross profit margin, -5.6 pct year on year. Since this year, energy storage installed capacity in overseas markets has begun to recover. Demand for inverters has begun to resume growth, and product prices have also stopped falling and stabilized. According to US Energy Administration (EIA) data, the cumulative installed capacity of the US in January-June was 4.23 GW, +136% year over year. EIA estimates that in the context of the peak installation season in the US in June, it is expected to achieve 3.09 GW of installed capacity, +192% YoY, +188%. On the domestic side, demand for installed energy storage continues to grow at a high rate. According to Polaris Energy Storage Network data, the tender capacity for domestic energy storage system projects from January to June 2024 was 41.1 GWh.
With a year-on-year increase of +27%, the company is expected to continue to benefit.
The company's charging pile business is developing rapidly.
The company's charging pile business achieved revenue of 0.56 billion yuan in the first half of the year, +45% year over year, gross profit margin of 38.1%, and -1.4 pct year on year. According to data from the China Charging Alliance, as of June 2024, the number of domestic public charging stations was 3.122 million, and the increase in domestic public charging stations in the first half of 2024 was 0.34 million, +9.5% over the same period last year. Overseas, as of June 2024, the 27 EU countries had 0.733 million public charging stations, and the number of new public charging stations added was 0.1 million in the first half of 2024, +3%; as of the end of June, the number of public charging stations in the US was 0.178 million, and the number added in the first half of the year was 0.018 million. The company continues to explore overseas markets for charging piles and is expected to maintain performance growth.
The industrial power supply business is developing steadily
The company's industrial power supply business achieved revenue of 0.25 billion yuan in the first half of the year, +17% year over year, gross profit margin of 54.7%, and +1.1 pct year over year. Benefiting from the rapid development of the domestic high-end equipment manufacturing industry and the steady growth of the photovoltaic industry, the company's business is expected to continue to improve.
Investment advice: Lower the profit forecast and maintain an superior market rating. We expect net profit to be 0.434/0.549/0.653 billion yuan in 2024-2026 (the original forecast 24-25 was 0.523/0.676 billion yuan), with year-on-year growth rates of 8%/26%/19%, respectively, and PE valuation 15.8/12.5/10.5 times. Maintaining an superior market rating.
Risk warning
Prices of upstream raw materials have risen sharply; competition in the charging pile industry has intensified; downstream demand for energy storage falls short of expectations.