24H1's performance increased significantly, cost reduction, efficiency and profitability improved. According to the company's 2024 semi-annual report, in the first half of 2024, the company's global brand strength and product competitiveness continued to improve. Internal cost reduction and efficiency achieved results, and performance was reversed, achieving revenue of 1.142 billion yuan, +24.02% year-on-year, and net profit of 72.8383 million yuan to mother, or +242.70% year-on-year. As inventory cost optimization, raw material procurement prices fall, and cost reduction measures continue to advance, the company's gross profit margin for the first half of 2024 was 46.39%, +8.13pct year on year, and 6.38% net profit margin to mother, +11.92pct year on year. Among them, 24Q2 achieved revenue of 0.56 billion yuan, +18.46% year over month, -3.79% month on month, net profit of 43.8385 million yuan, +305.13% year over month, +51.17% month on month, gross profit margin of 46.25%, +9.64 pct year on year, -0.28 pct month on month, 7.83% year on year, +2.85 pct month on month.

Deepening the global brand strategy, stabilizing the leading position in portable energy storage. The company is a leading portable energy storage company with two major brands, “Jackery Store Little Two” and “Geneverse Electric Treasurer”. It uses the M2C business model to achieve global sales through the trinity of “independent brand website, third-party e-commerce platform, and offline retail”. The cumulative sales volume is nearly 4 million units, leading the world in sales. The company has set up 21 brand websites around the world, covering more than 50 companies and regions. 24H1's independent website sales share has increased to 27.15%. Furthermore, through cooperation with world-renowned brands and retailers, the company's products have entered more than 10,000 retail channels, covering many well-known retailers. With industry-leading R&D and innovation capabilities, the company has mastered many core technologies in the fields of portable energy storage, household energy storage, etc., and enjoys a wide international reputation and global influence.

The product matrix was broadened, and overseas markets gradually recovered. In order to cope with insufficient competition and demand in the industry, the company promoted product renewal and iteration to drive downstream demand and develop a second growth curve focusing on household energy storage. In the first half of 2024, the company launched a new generation of safe and fast charging outdoor power supply 1000Pro2, optical charging outdoor power supply 600Plus, DIY small home green power system, and Smile PV tile home green power system to further expand the product matrix and enhance the company's brand competitiveness. At the same time, as the company continues to deepen its global brand strategy and the overseas market gradually recovers, the company achieved a 38.17% year-on-year increase in revenue in the US market and a 51.13% year-on-year increase in revenue in the Japanese market in the first half of 2024. We expect that with the implementation of US interest rate cuts, overseas market demand will expand further. The company plans to launch second-generation fixed household energy storage products in the US market in the second half of the year, which will also bring new growth impetus to the company.

Profit forecasting and valuation. We expect the company's net profit to be 0.208 billion yuan, 0.3 billion yuan, and 0.419 billion yuan respectively in 2024-2026. Considering comparable company valuation levels and company business conditions, we gave the company a PE valuation of 60-65 times in 2024, with a corresponding reasonable value range of 100.04-108.37 yuan. For the first time, coverage gave it a “superior to the market” rating.

Risk warning. Risks caused by fluctuations in raw material prices; risk of downstream demand falling short of expectations; risk of changes in new energy policies; risk of worsening competition patterns.