24H1's performance grew steadily, revenue +30%, and net profit to mother +0.02%. Shenghong Co., Ltd.'s 24H1 revenue was 1.43 billion, yoy +29.84%. We believe that charging piles were the main driving force for growth in the first half of the year. 24H1 new energy conversion equipment revenue 0.46 billion, yoy +19.6%, electric vehicle charging stations 0.56 billion, yoy +44.8%, battery testing and chemical equipment 0.13 billion, yoy +35.5%, industrial supporting power supply 0.25 billion, yoy +17.4%. Net profit to mother reached 0.18 billion, yoy +0.02%. Mainly due to a decline in exchange earnings and an increase in expenses due to the commissioning of the Suzhou Industrial Park, etc., the net profit to the mother was stable. The gross profit margin was 39.6%, -2.0pct year-on-year, and gross margin decreased. We believe that the main revenue share is that new energy conversion equipment and electric vehicle charging stations account for a large share of revenue. However, these two gross margins are lower and lower than last year, 30% and 38.1%, respectively, and -5.6 pct and -1.4 pct year-on-year, respectively.
Energy Storage 24's revenue in the first half of the year was +19.6%, and the growth rate slowed. 24H1 energy storage revenue is 0.46 billion, yoy +19.6%, with a year-on-year decline of 5.63 pcts. We believe that the main reason is that US interest rates remain high, affecting the demand for energy storage in industry and commerce. The probability that the Federal Reserve will cut interest rates in September is high, and demand for industrial and commercial storage may recover in the future. We expect the energy storage business to +30% to $1.18 billion in 2024, with a gross profit margin of 30%.
Charging Station 24's revenue in the first half of the year was +44.8%, and profit margins remained high. The revenue of the 2024H1 charging pile was 0.56 billion, yoy +44.8%, and the gross margin was as high as 38.07%, -1.39 pct year on year. Shenghong's high gross margin of charging piles was mainly due to independent manufacturing of core components such as modules. Revenue has maintained a high growth trend, and the investment of downstream charging and switching operators is heating up, driving the increase in demand for charging and switching products. We expect Shenghong charging pile revenue of 1.23 billion in 2024, yoy +45%, and gross profit margin 38%.
Overseas expansion of battery testing and chemical forming equipment. 24H1 industrial power supply revenue of 0.25 billion, yoy +17.4%, gross profit margin 54.73%. 24H1 battery testing and chemical equipment revenue was 0.13 billion, yoy +35.5%, gross profit margin 48.95%. Overseas battery factories' production capacity continued to expand in 2023. The company achieved overseas breakthroughs in battery testing and chemical equipment in 2023, and is expected to maintain the trend of contrarian growth in 2024 in the downward cycle of the industry.
Profit forecasting and investment ratings. We estimate that the company's net profit for 24-26 will be 0.482/0.623/0.801 billion yuan, respectively, and the corresponding EPS will be 1.55/2.00/2.58 yuan, respectively. Comparable to the company's 2024 PE was 19 times. We gave 2024 a PE valuation range of 18-23 times, with a corresponding reasonable value range of 27.87-35.61 yuan. The investment rating is “superior to the market”.
Risk warning: The growth rate of the energy storage market falls short of expectations, demand for charging piles falls short of expectations, adverse changes in overseas trade policies, and fluctuations in raw material market prices.