The company is a manufacturer of distributed photovoltaic energy storage systems and products, focusing on the field of energy storage and photovoltaic inverters for a long time. In the past few years, the company has focused on promoting its all-in-one computers and high-voltage household storage products, seizing the big opportunity of the European household storage industry. Since the second half of 2023, the household storage industry has begun to go to storage, and most household storage companies are under double pressure from shipment volume and price. During this period, on the one hand, the company actively expanded product categories and reserve growth points; on the other hand, it strengthened market development outside of Europe. We have analyzed that the company's subsequent business situation may gradually resume.

Company profile. The company was founded in 2012 and is mainly engaged in energy storage systems and photovoltaic inverter products. In the past, the company had a clear strategy and positioned high-end household storage in Europe. In response to the huge demand for household storage in the context of the European geographical conflict in 2022, the company concentrated production capacity and resources on the European market, focused on promoting high-end products such as all-in-one computers and high-voltage batteries, and actively carried out supply chain management to successfully seize opportunities in the household storage industry. Revenue increased sharply by 454% in that year.

The R&D system is sound, and product categories are actively being expanded. The company attaches importance to R&D investment. It is one of the earliest domestic companies engaged in photovoltaic inverters and energy storage PCS. It has accumulated experience in the electric/photovoltaic industry, and its power electronics research and development capabilities are strong. The company's previous advantage was high-end household storage products. In a period of weakness in the industry, the company actively cultivated new product categories, including low-voltage battery energy storage, industrial and commercial energy storage, micro inverters, high-power grid-connected inverters, etc., which enriched the product range and expanded its business coverage. It is expected that the company's new products, such as industrial and commercial energy storage, are expected to increase in volume and form new growth points.

The advantages of overseas channels are obvious, and the expansion of emerging markets is accelerating. The company has worked in overseas markets earlier. It has service outlets or offices in Europe, America, Australia, South Africa, and Latin America, and has obtained more than 1100 certifications around the world, including the most difficult certification JET. The company has an outstanding channel advantage in the European market, with a high market share, especially in the German-speaking region. In recent years, the company has gradually strengthened its market development in Africa and Europe. For example, it has increased investment in products and channels in regions such as Japan, Eastern Europe, Brazil, India, and Pakistan. The growth of business in non-European regions, represented by emerging markets, is expected to drive the company to the next level.

The new market for household storage is expected to be launched. The European market is coming to an end, but products are still being upgraded. As prices in the industrial chain drop sharply, demand for distributed energy storage systems is beginning to emerge in developing countries with weak power infrastructure. In particular, demand from Asian countries represented by India and Pakistan is being stimulated, and similar markets are likely to increase. On the other hand, the oxtail effect brought about by the explosion of the European household storage market in 2022 made industry inventory problems begin to appear last year. After nearly a year of industrial storage removal, European inventory removal has basically come to an end. At the same time, overseas market development and policy evolution have posed higher challenges to product-side performance. Some European and American countries have allowed household storage to participate in electricity market transactions. Integrated machines and high-voltage battery routes with higher internal conversion efficiency and faster command response may be more in line with their business needs, or the direction of the high-end household storage market.

Investment advice: The company's net profit for 2024-2025 is estimated to be 0.548 or 0.767 billion yuan, corresponding to PE22x and 16x. Give it an “gain” rating.

Risk warning: Industry inventory removal falls short of expectations, the company's new product sales fall short of expectations, new market development falls short of expectations, and risk of stock price fluctuations.