Description of the event

Goodway released its 2024 semi-annual report. 2024H1 achieved revenue of 3.148 billion yuan, down 17.47% year on year; net profit to mother of 0.024 billion yuan, down 103.22% year on year; among them, 2024Q2 achieved revenue of 2.022 billion yuan, down 3.5% year on year, up 79.51% month on month; net profit to mother of 0.005 billion yuan, down 98.77% year on year, up 117.32% month on month.

Incident comments

Quantitatively, the company sold 0.2785 million inverters in the first half of the year, including 0.2559 million grid-connected units and 0.0226 million energy storage units.

The Q2 grid connection is expected to approximately double month-on-month, and its share in China has increased. Q2 sales of energy storage inverters are expected to increase slightly month-on-month and are still at a low base. Battery sales in the first half of the year were 132 MWh, of which Q2 sales are expected to nearly double month-on-month, and the distribution ratio will further increase.

On the positive side, the company's gross margin of grid-connected inverters is expected to be higher than domestic gross margin in the first half of the year, while the gross margin of energy storage inverters remains high. Among them, the gross margin of Q2 inverters is expected to decline month-on-month, mainly due to factors such as increasing domestic share and lowering the average.

In the household distributed systems business, the company's sales volume in the first half of the year was about 404 MW. It is expected that Q2 will also achieve significant month-on-month growth, and gross margin will remain relatively stable. The related subsidiary Yude New Energy (holding 70% of the shares) achieved a profit of 0.092 billion yuan in the first half of the year.

In terms of financial data, the company's expense ratio during the Q2 period was 17.7%, down 11.5pct from month to month, returning to a historically low level. Mainly, the company increased its cost control efforts to improve production efficiency. At the same time, the company's revenue scale expanded, and the dilution effect was good.

In addition, the company experienced asset impairment losses of 0.027 billion and credit impairment losses of 0.018 billion in Q2, affecting the release of profit on the reporting side.

Looking ahead, the company's demand for energy storage inverters improved month by month. September benefited from continued inventory removal, end of European vacations, and launch of low-voltage products. The company has accumulated deep advantages in European brand channels, and expectations for gradual improvement in 2025 are still clear.

The company is expected to achieve net profit of 0.87 billion yuan in 2025, which is 12 times PE. Maintain a “buy” rating.

Risk warning

1. Deterioration of the competitive landscape;

2. PV installation falls short of expectations.