Event: The company released the 2024 three-quarter report forecast. 2024Q1-3 achieved net profit of 0.436-0.462 billion yuan, a year-on-year increase of 96.47%-107.99%, and realized net profit without deduction of 0.38-0.406 billion yuan, an increase of 119.17% to 133.91% year-on-year. On a quarterly basis, 2024Q3 achieved net profit of 0.243-0.268 billion yuan, a year-on-year increase of 90.00%-110.00%, a month-on-month increase of 84.60%-104.04%, and realized net profit withheld from non-mother of 0.22-0.245 billion yuan, an increase of 91.36%-113.62% year-on-year, and a year-on-year increase of 94.61% to 117.25%. The company's performance surpassed expectations.

The charging network business has been developing steadily, and the charging capacity has steadily ranked first in the country. According to data from the China Charging Alliance, as of the end of August '24, the number of charging stations operated by Telco was 0.6215 million, with a market share of 19%, of which the number of public DC charging stations was 0.3726 million, +38%, with a market share of 26%. The company's cumulative charging volume in January-August was 8.2 billion kilowatt-hours, or +41% year-on-year. The charging volume in August was 1.22 billion kilowatt-hours, accounting for 23% of the country's public charging capacity. According to data from the China Automobile Association and the Ministry of Public Security, as of the end of June '24, China had approximately 0.345 billion vehicles. At the end of August, China had 27.44 million new energy vehicles, +54% over the same period. The penetration rate was about 8%, and there is plenty of room for growth. The company continued to be deeply involved in the charging network business. Charging pile construction remained at a high level, electricity service fees were raised moderately to improve profit levels, and maintained a good development momentum in the third quarter.

The competitiveness of traditional main businesses is gradually reflected, and profitability continues to improve. During the reporting period, the company grasped the development opportunities of the country's “dual carbon” and “new power system” strategies, deepened its main business, continued innovation, and strengthened its core competitiveness. “Intelligent manufacturing+integrated services” developed well. The company continues to increase technological advancement and iterative upgrading, continuously improve the level of standardization and modularization of products, and promote the implementation of new materials and structures to create a competitive cost advantage. The company's profitability has improved significantly compared to the same period last year.

The company continues to focus on high-quality domestic customers and accelerate the expansion of international business, and the winning bid amount remains at a good level.

Investment advice: The company's power equipment and charging network business is two-wheel drive. We expect the company to achieve net profit of 0.761/1.024/1.434 billion yuan in 2024-2026, +54.92%/+34.57%/+40.01% over the same period, corresponding EPS of 0.72/0.97/1.36 yuan, maintaining a “buy” rating.

Risk warning: NEV sales fall short of expectations; charging pile construction falls short of expectations; industry competition intensifies.