Incident: On October 28, 2024, the company released its 2024 three-quarter report. In the first three quarters, the company achieved operating income of 2.133 billion yuan, a year-on-year increase of 35.02%, achieving net profit attributable to shareholders of listed companies of 0.159 billion yuan, an increase of 357.06% over the previous quarter; achieved revenue of 0.99 billion yuan in a single quarter corresponding to the third quarter, an increase of 76.76% over the second quarter, and achieved net profit of 0.087 billion yuan year-on-year 888.9%/97.52% achieved deduction of non-net profit of 0.057 billion yuan, up 231.58%/113.48% year over year, respectively, and the performance recovered strongly.

Actively build a To-C channel, and welcome gains with a global layout. The company focuses on portable and DIY energy storage products that are easy to use. It does not have too many professional electrification requirements for installers and users. It positions consumer products, and directly reaches the C-side through the tripartite combination of the brand's official website, third-party e-commerce platforms, and offline retail. Up to now, the company has established 23 brand websites around the world, with products covering more than 50 countries and regions, and the brand's official website revenue increased 61.81% year-on-year in the first three quarters, achieving monthly sales exceeding 100 million yuan. In terms of offline retail, the company cooperated closely with world-renowned brands or retailers, and the products have successfully entered more than 10,000 world-renowned retail channels such as Costco, Walmart, and Home Depot. Continued channel improvement and deepening globalization strategies helped the company separate the two major markets in the US and Japan in the first three quarters It achieved 41.12% and 72.69% year-on-year revenue growth, and brand influence and market share increased steadily.

New product development is full of iterative energy, and cost reduction and efficiency are beginning to bear fruit. The increasingly complex electricity environment and direct transmission of C-side demand require portable and DIY energy storage products to match rapid response technology iterations. With sharp insight into user needs and deep R&D capabilities, the company continues to promote the upgrade and iteration of SolarGenerator light-charging outdoor power products, and has successively launched a new generation of flagship products based on innovative CTB module structure design. Several segmented products have achieved the smallest size and lightest user experience in the same battery cell and capacity segment. Leading technology iterations drive Solar Generator In the first three quarters, optical charging outdoor power products achieved a sharp increase of about 130% in revenue over the previous year, accounting for nearly 50% of revenue. In terms of cost reduction and efficiency, in addition to gradually eliminating cost disruptors such as raw material prices and inventory accumulation, the company achieved effective cost rate control through measures such as optimizing the labor cost structure, improving advertising accuracy and marketing material reuse rate. In the first three quarters of 24, the company's comprehensive gross margin was 45.17%, up 5.86 PCT year on year, sales expenses decreased 7.36 PCT year on year, and management expenses decreased 4.06 PCT year on year. The two-pronged approach significantly restored profitability and led to a steady recovery in performance.

Investment advice: In the era of affordable Internet access, the economy and reliability of optical storage and power generation are becoming more prominent around the world. The company has been deeply involved in the portable energy storage industry for many years, has both brand and channel advantages, and continues to iterate new technologies and products. Shipments are expected to maintain a high upward trend. Continued cost reduction and efficiency and a steady asset structure will also help stabilize the company's profitability. It is expected that the company will achieve operating income of 3.016, 3.985, and 5.16 billion yuan in 2024 to 2026, and achieve net profit to mother 0.29 and 0.387 billion yuan, up 211.9%, 49.3%, and 33.3% year on year. The corresponding EPS is 1.56, 2.33, and 3.10 yuan, respectively. The PE multiples corresponding to the current stock price are 53.7X, 35.9X, and 27.0X. This was covered for the first time, and the rating was “increased”.

Risk warning: storage and installation alone fall short of expectations, risk of fluctuating raw material costs, risk of overseas exchange, risk of increased industry competition, etc.