Event: The company released its 2024 semi-annual report. With 2024H1, the company achieved operating income of 1.142 billion yuan, an increase of 24.02% over the previous year; realized net profit of 0.073 billion yuan after deduction; realized net profit deducted from mother of 0.04 billion yuan, which turned a loss into a profit compared to 2023H1; and achieved an overall gross profit margin of 46.39%, an increase of 7.31 Pct over 2023H1. The company plans to distribute a cash dividend of 2.83 yuan (tax included) to all shareholders for every 10 shares, for a total cash dividend of 35.08 million yuan (tax included).

Incident reviews:

The profitability of portable energy storage products and solar panels has increased, and internal cost reduction and efficiency strategies have achieved remarkable results. In the first half of 2024, the company's portable energy storage product revenue was 0.911 billion yuan, up 18.72% year on year, gross margin was 45.62%, up 6.95 pct from 2023H1; solar panel revenue was 0.223 billion yuan, up 53.56% year on year, gross margin was 50.24%, up 8.18 pct from 2023H1.

With the decline in raw material prices, the optimization of the inventory structure, and the continuous advancement of measures to improve product quality and cost reduction, 2024H1's gross margin increased significantly, up 6.68 Pct from the end of 2023. The company's sales and management expenses ratio was 29.06% and 7.17%, down 8.12 Pct and 4.68 Pct respectively from 2023H1. The cost control effect was obvious.

The company continues to deepen its global brand strategy and strengthen its global channel layout. 2024H1, the company achieved revenue of 1.073 billion yuan from overseas sales, accounting for 93.89% of total revenue, an increase of 30.10% over the previous year.

Among them, the company is committed to continuous development investment and brand building in the US and Japanese markets, achieving a 38.17% year-on-year increase in revenue in the US market, a 51.13% year-on-year increase in revenue in the Japanese market, a year-on-year increase of 0.645 billion yuan, a year-on-year increase of 33.94%; Asia (excluding the Chinese market) achieved sales of 0.353 billion yuan, an increase of 52.57% year on year. Furthermore, in order to further strengthen the penetration of the global market, the company is actively strengthening the global channel layout. Through the integration of independent official websites, third-party e-commerce platforms, and offline retail channels, the company's products have sold over 4 million units, leading the global sales volume. At present, the company has established 21 independent official websites around the world, and its business covers more than 50 countries and regions around the world.

The company attaches great importance to R&D investment and continues to expand its product matrix. The compound annual growth rate of the company's R&D expenses in the past three years has reached 86.31%. In the first half of 2024, the company invested 78.3786 million yuan in R&D expenses, 6.86%, and R&D personnel accounted for 19.69%. Efficient R&D transformation ensured the continuous upgrading of the company's technology and continuous product updates and iterations.

In the first half of 2024, the company launched new flagship products such as the new generation of safe and fast charging outdoor power supply 1000Pro 2 and the optical charging outdoor power supply 600Plus. At the same time, the company launched full-scene home green power solutions, including the world's first DIY small home green power system and the world's leading Smile PV tile home green power system. The first batch of products has already been launched in Germany.

Investment advice:

We raised our performance forecast. We expect the company's net profit to be 0.209/0.318/0.413 billion yuan for 2024-2026 (the previous forecast was 0.168/0.243/0.25 billion yuan), EPS was 1.68/2.55/3.31 yuan, respectively, and the PE corresponding to the current stock price is 42.88/28.18/21.70 times, respectively. Considering that the company is a leader in portable energy storage, the internal cost reduction and efficiency strategy is remarkable and continues to expand multi-scene optical storage and charging system products, so it maintains a “buy” rating.

Risk warning:

The risk of upstream cell price fluctuations; the risk of downstream demand falling short of expectations; the risk of increased market competition.