Core Viewpoint - The report from CICC highlights that Shuangdeng Co., Ltd. (06960) is a leading player in the domestic communication and data center energy storage market, serving major domestic cloud service providers (CSPs) and key overseas power equipment manufacturers. The initial coverage gives an "outperform" rating with a target price of HKD 22.90 [1]. Industry Insights - The energy storage market has significant growth potential, driven by declining battery costs and supportive policies, leading to rapid global development. The demand for data center energy storage, including backup power and regulation storage, is expected to be released quickly due to increased capital expenditure in computing power [2]. - The power storage sector is entering an upward cycle, with improved economics for independent storage in China and overseas energy structure transformations. The supply-demand relationship is expected to reach a turning point in Q3 2025, with leading energy cell manufacturers facing supply shortages, benefiting mid-tier manufacturers through order overflow and improved utilization rates [2]. Company Positioning - The company's energy storage business focuses on data center scenarios, positioning itself with leading domestic CSPs and major overseas power manufacturers. According to Frost & Sullivan, it is projected to hold the top market share in backup power for data centers in both domestic and global markets by 2024. The establishment of overseas factories is expected to enhance the company's growth potential [2]. - The market perceives the company's overseas progress as slow; however, it has already entered the overseas supply chain and positioned itself with key customers, indicating substantial future growth potential. Potential catalysts include continued unexpected increases in capital expenditure from terminal CSPs and ongoing progress in orders from mainstream CSPs both domestically and internationally [3]. Financial Projections - The company is projected to have an EPS of RMB 0.65 and RMB 1.29 for 2025 and 2026, respectively, with a CAGR of 24.8% from 2024 to 2026. The current stock price corresponds to a 10.1x P/E for 2026, while the target P/E is set at 16.0x, leading to a target price of HKD 22.90, representing a 58.0% upside potential, with an initial coverage rating of "outperform" [4].
中金：首次覆盖双登股份(06960)予“跑赢行业”评级 目标价22.90港元