It appeared at SNEC ES+ and India International Renewable Energy Exhibition, and is actively promoting global development. On September 23 and September 24, the company announced invitations to the SNEC ES+2024 and India International Renewable Energy Exhibition. China and India are major developing countries with a new energy boom in 24 years. Excellent domestic brands are expected to better activate the company's brand awareness and seek more opportunities to optimize global optical storage sales channels through such platforms.

The mid-report results were consolidated, Q2 improved significantly, and we are waiting for the H2 boom to maintain. The company's revenue for the first half of the year was 4.75 billion yuan, -3.0% YoY; net profit to mother was 1.24 billion yuan, -2.2% YoY. Taking into account the base for the first half of '23, there was a significant improvement in the Q2 quarter. The company's revenue for Q2 was 2.86 billion yuan, +2.0% YoY, +52.1% month-on-month, and net profit to mother was 0.8 billion yuan during the same period, +19.0% YoY and +85.4% month-on-month.

The economy of optical storage has catalyzed the release of demand in emerging markets, and electricity demand in developing countries has increased. According to the company's announcement, Pakistan's long-term electricity restrictions due to fuel shortages, weak power generation capacity, and a high degree of aging power grids have stimulated demand for optical storage to a certain extent due to the IMF's requirements. Although recent industry information suggests that electricity prices may be adjusted to a certain extent, the underlying conflict still needs to be resolved, and the continuation of the demand for optical storage is expected to continue. India has experienced large-scale and continuous power outages due to continued high temperatures, and the government is encouraging the installation of energy storage. It is urgent to promote high coverage of household photovoltaics and ease the pressure on the power system. Furthermore, political and geopolitical conflicts have spawned household savings demand. In Ukraine and other regions, the country's power generation capacity has plummeted due to the war, and electricity supply is extremely scarce. As global electricity costs fall and demand for new energy consumption increases, demand in traditional energy storage markets such as Europe, America, and South Africa is expected to gradually pick up, and emerging markets represented by Southeast Asia are expected to rise.

Based on the company's 24H1 business situation, we adjusted the company's 24-26 profit forecast. We forecast the company's net profit for 2024-2026 to be 2.931 billion, 3.794 billion, and 4.5 billion yuan (the original forecast was 3.138 billion and 4.544 billion yuan for 2024 and 2025, respectively), with corresponding earnings per share of 4.55, 5.88, and 6.98 yuan respectively; refer to comparable companies giving the company 24 years 22 times PE, corresponding target price of 100.04 yuan, maintaining the buy rating.

Risk warning

Overseas optical storage demand falls short of expectations, risk of gross margin fluctuation, risk of energy storage battery business development falling short of expectations, risk of exchange rate fluctuations, risk of increased competition, and risk of the international situation affecting exports.