Key points of investment:

Revenue grew rapidly year-on-year, fully reflecting cost reduction and efficiency gains

2024H1: The company achieved revenue of 1.14 billion yuan, a year-on-year increase of 24%, achieved net profit of 0.07 billion yuan, and realized net profit of 0.04 billion yuan after deduction of non-return to mother. They all reversed losses year over year, exceeding the performance forecast center. The gross margin reached 46.4%, or +7.3pct; the net profit margin reached 6.4%, or +11.9pct.

Sales/ Management/ R&D/ Finance expenses were 29.1%/7.2%/6.9%/-3.2%, respectively, the same as -8.1/-4.7/-1.5/+4.9pct.

24Q2: Achieved revenue of 0.56 billion, +18%, and -4%; realized net profit of 0.044 billion yuan, reversing loss year over year, +51%; deducted non-0.027 billion, reversing loss year on year, +103%. Gross margin reached 46.2%, same +9.6pct, ring -0.3pct; net profit margin reached 7.8%, same +12.3pct, ring +2.8pct. Sales/management/R&D/finance expenses were 28.3%/7.4%/6.8%/-1.8%, the same as -9.8/-4.8/-0.8/+10.8pct, and -1.5/+0.4/-0.1/+2.7pct, respectively.

By product: PV product support rate increased. The pioneering DIY small home green power system released 24H1 portable energy storage product sales reached 0.91 billion yuan, +19% year over year, gross margin reached 46%, up 6.95 pct year on year; solar panel sales were 0.22 billion yuan, +54% year over year, gross margin reached 50%, up 8.2 pct year on year. By the end of 2024H1, the company's portable energy storage and photovoltaic products had sold over 4 million units. 2024H1, the company launched new flagship products such as the new generation of safe and fast charging outdoor power supply 1000Pro2 and the optical charging outdoor power supply 600Plus. For the home optical storage scenario, the company launched the world's first DIY small home green power system and the Smile PV tile home green power system. Continue to improve the product matrix and use your advantages to seize more market opportunities.

By region: 24H1 US/Japan's revenue increased 38%/51% year over year, consolidating the global channel layout of 24H1 overseas revenue of 1.07 billion yuan, +30% year over year, accounting for 94% (+ 4pct year on year), gross margin reached 48%, +6pct year on year. Among them, US revenue increased 38% and Japanese revenue increased 51%. Revenue from North America was 0.64 billion yuan, +34%, accounting for 56% (+4pct year on year); Asia (excluding domestic) revenue was 0.35 billion yuan, +53% year over year, accounting for 31% (+6pct year on year); European revenue was 0.07 billion yuan, -34% year over year, accounting for 6% (-5pct year on year); revenue from other regions was 6.14 million yuan, or -21% year on year. Domestic revenue was 0.07 billion yuan, -28% YoY, gross margin 27%, +10pct YoY. The company has established 21 independent official websites around the world, covering more than 50 countries and regions around the world. Close cooperation with world-renowned brands and retailers has been further strengthened, and the products have successfully entered more than 0.01 million world-renowned retail channels such as Costco, HarborFreightTools, Walmart, HomeDepot, Target, BestBuy, Lowe's, BicCamera, Edion, and YodobashiCamera, increasing brand influence and market share.

Profit forecasting and investment advice

We expect the company's net profit to be 0.22/0.31/0.4 billion yuan respectively for 2024-2026, corresponding to PE of 41/29/22 times. The recovery of the company's gross profit margin and net interest rate exceeded expectations, and revenue in key overseas regions increased rapidly. It is expected that the scale will be further increased after the launch of the new product and maintain the “buy” rating.

Risk warning

Industry demand fell short of expectations, raw material prices rose sharply, and the competitive landscape intensified.