24Q3 revenue was 0.222 billion yuan, -14.16%/-6.25% YoY, net profit to mother -0.004 billion yuan, and -120.04%/-150.00% YoY, mainly due to amortization of large share payment expenses and increase in period expenses. After deducting non-net profit -0.005 billion yuan, -155.26%/-168.33% YoY. 24Q3 gross margin/net margin reached 30.82%/-2.04%, +0.82/-5.49pct, 24Q3 expense ratio reached 31.38%, +3.77pct month-on-month, of which sales/management/R&D/finance were +2.15/-0.30/+2.13/-0.21pct, respectively. We believe that the company's business expansion is progressing steadily and that its technical advantages are remarkable. The company's profitability is expected to pick up next year and maintain its “gain” rating.

Launch high-power overcharged charging piles, new iterative distributed energy storage products

According to the National Energy Administration, China added 1.189 million new charging stations in 24Q3. As the penetration rate of new energy vehicles rises, the company is expected to benefit from the continued increase in domestic demand for charging piles. In September '24, the company pioneered the launch of the second-generation 640/800/1000kW split DC charger with high-power group charging, making it the first enterprise in the industry to achieve multi-machine parallel connection and cross-model paralleling. The company is actively iterating energy storage products and has successively launched 107 kW/215 kWh distributed energy storage systems, 30 kW/64 kWh distributed energy storage systems, 115 kW/233 kWh distributed energy storage systems, pre-installed energy storage systems, etc., to meet the needs of distributed power generation and microgrids from various angles.

Acquire China Innovation Airlines and enter the low-altitude economic circuit

The company invested 57% of the shares in China Innovation Airlines to enter the low-altitude economic circuit. China Innovation Aviation's main products include industrial-grade unmanned helicopters and professional flight control systems. It is one of the few domestic manufacturers that also has the ability to develop unmanned helicopter flight control systems and flight platforms. The self-developed ZC series tandem double rotor series unmanned helicopters have the characteristics of large payload, long flight time, and high reliability. The ZC500 model has been well received by the market, and the company is expected to launch a new product with a load capacity of 600 kg by the end of 24. Unmanned helicopters have broad application space in fire protection, power grids, oil exploration, etc., and the company's charging pile business has accumulated power electronics technology and customer resources such as local urban investment and the State Grid South Grid. China Innovation Airlines is expected to use this to achieve collaborative development.

Maintain profit forecasts and maintain “increase holdings” ratings

We maintain our profit forecast. We expect the company's net profit to be 0.148/0.227/0.36 billion yuan for 24-26, respectively. Referring to the consistent expectations of the comparable company Wind, the 25-year average PE is 18 times. Considering that the company's charging piles and energy storage have channel advantages, the company was given 27 times reasonable PE in 25 years, corresponding to the target price of 8.91 yuan (previous value 7.64 yuan), maintaining the “increase” rating.

Risk warning: NEV production and sales growth fell short of expectations, charging pile shipments fell short of expectations, and increased competition in the industry led to a decline in profitability.