Brief performance review

On August 29, the company disclosed its 2024 semi-annual report. The first half of 2024 achieved revenue of 0.9 billion yuan, a year-on-year increase of 37%; net profit to mother was 0.088 billion yuan, a year-on-year decrease of 35%. Among them, Q2 achieved revenue of 0.47 billion yuan, an increase of 10% over the previous month, and realized net profit of 0.048 billion yuan to mother, an increase of 20% over the previous month.

Management analysis

Inventory removal from Europe has accelerated, and inventory and delivery conditions have recovered well. At the end of the report, the company's inventory was 1.5 billion yuan, a slight increase from the beginning of the period. Among them, inventory was 0.69 billion yuan, down 0.16 billion yuan from the beginning of the year, and issued 0.034 billion yuan, an increase of 0.015 billion yuan over the beginning of the year. With the acceleration of inventory removal in the European market, compounded by expectations of monetary policy easing, the company's inventory and delivery situation improved markedly compared to the previous period.

The cost side improved significantly year over year, but it is still higher than in the same period in 2022. The company's sales, management, and R&D expenses in the first half of the year were 7.45%, 4.69%, and 6.30% respectively, down 4.04pct from the same period last year, but it is still 4.07pct higher than the same period in 2022, mainly because the company continues to increase R&D investment and expand the optical storage category. It is expected that in the future, as sales scale increases, the company's cost ratio is expected to gradually improve.

New household, industrial and commercial products continue to make breakthroughs, which is expected to support the growth of sales revenue. In the first half of the year, the company launched a new optical storage hybrid micro inverter EZHI, which is mainly aimed at the DIY balcony low-light storage market. Its advantages such as ease of installation, economy and flexibility are widely popular with users, and the sales scale is growing rapidly. At the same time, the company's industrial and commercial optical storage products received T? A number of certifications issued by V Rhein Group prove that it has reached the advanced level of safety and reliability recognized by international standards, providing a foundation for subsequent overseas sales.

Profit Forecasts, Valuations, and Ratings

According to the company's semi-annual report and our latest judgment on the industry, the company's 2024-2026E net profit was adjusted to 0.28, 0.44, and 0.62 billion yuan, respectively. The corresponding PE valuation was 24, 15, and 11 times, maintaining the “buy” rating.

Risk warning

International trade policy risk; risk of exchange rate fluctuations; increased risk of market competition.