The smart controller industry has a broad market space, and Tuobang Co., Ltd. has a leading position. Intelligent controllers are one of the core components of intelligence. They are used in a wide range of fields, including household appliances, smart homes, smart buildings, power tools, industry and automation, automotive electronics, and new energy. In the field of intelligent control, based on adhering to the value concept of an “agile innovation partner” and driven by technological innovation, Tuobang Co., Ltd. has provided leading customized intelligent control solutions for the four major industries of home appliances, tools, new energy, and industry through the construction of a “four power grid” (electronic control, motor, battery, power supply and IoT platform), leading the industry.

The tool business continues to expand application scenarios. In the power tool market, the penetration rate of electric tools in the European and American markets is high, and demand for new products and technology upgrades continues to increase. Emerging markets are expected to bring continuous growth impetus to the development of the tool industry as electrification and cordless penetration in various professional, industrial, and consumer scenarios. Tuobang Co., Ltd. focuses on leading customers and industrial-grade and professional-grade high-value products, continuously increases sales, implements special breakthroughs in products, and incubates new business opportunities such as high voltage and high power. The company has accumulated core technologies and complete machines for electronic control, battery pack BMS, motors, Internet of Things, and intelligent systems to provide customers with one-stop customized solutions and expand product application scenarios in surrounding scenarios where tools are used. The share of the tool business in total revenue increased from 36.05% in 2023 to 39.05% in 24H1.

The share of the home appliance business continues to increase. As an important partner for home appliance brands, Tuobang Co., Ltd. pays more attention to understanding consumer needs. The company's platform-based technology advantages can quickly empower brand customers and increase the share of leading home appliance customers in many European, American, Japanese and emerging markets. The company went hand in hand in various segments, contributing a major part of the increase in ice washing, small household appliances, and cleaning products. Among them, air conditioning focused on overseas markets, with the largest increase and continued to grow rapidly. By focusing on high-growth categories in emerging markets, the company uses product strength and supply chain advantages to provide more cost-effective products to drive the company's growth. The home appliance business 24H1 achieved sales revenue of 1.773 billion yuan, an increase of 18.15% over the previous year.

The new energy business has broad scope for long-term growth. With the core technology of “1 charge, 1 chip, 1 cloud 3S” (charging, battery, cloud platform, BMS, PCS, EMS), Tuobang Co., Ltd. provides customers with two types of products: controllers and components, complete machines and systems, which are mainly used in the two major fields of energy storage and new energy vehicles. The company actively grasps incremental market opportunities such as large storage, industrial and commercial energy storage, and NEV charging, and has broad room for long-term growth. The 24H1 new energy business achieved sales revenue of 1.04 billion yuan, an increase of 13.74% year-on-year.

Profit forecast, valuation and rating: According to the company's announcement, the company will be affected by industry inventory removal, rising raw material prices, and a lower consumer information index in 2023, which had a certain impact on the company's net profit level, and this impact is likely to continue. We lowered the company's 2024/2025 net profit forecast to be 0.722/0.922 billion yuan, down 10%/8% from the previous one, and added the company's 2026 net profit forecast to 1.114 billion yuan, corresponding to PE19/15/12X. We are optimistic about the company's long-term growth potential and maintain a “buy” rating.

Risk warning: Product competition incentives lead to a decline in gross margin; downstream market demand falls short of expectations.