ZENERGY(3677.HK)：HIGHER EARNINGS VISIBILITY AMID BETTER CLIENT MIX POSSIBLE BATTERY PRICE HIKE

Core View - Zenergy's FY25E net profit forecast is revised up by 4% to RMB591 million due to a better product mix, with expectations for continued positive trends into FY26E [1] - GAC Toyota is anticipated to become Zenergy's largest revenue contributor, surpassing Leapmotor [1] Group 1: FY25E Outlook - Zenergy's FY25E battery sales volume forecast is increased from 18.4 GWh to 19.6 GWh, driven by strong sales of the Toyota bZ3X BEV and IM LS6 EREV [2] - The average selling price (ASP) is expected to rise to RMB0.43/Wh in 2H25E from RMB0.41/Wh in 1H25 due to improved product mix [2] - Gross margin is projected to widen by 0.2 percentage points to 18.1% in 2H25E, contributing to an operating margin increase of 2.2 percentage points to 6% [2] Group 2: FY26E Outlook - Zenergy maintains a sales volume forecast of 30 GWh for FY26E, with an 8% revenue forecast increase to RMB14.6 billion due to a better client mix and potential battery price hikes [3] - Gross margin for FY26E is expected to widen by 0.5 percentage points to 18.5% [3] - FY26E net profit forecast is raised by 4% to RMB1.36 billion, while FY27E net profit is maintained at RMB1.88 billion [3] Group 3: Valuation - The company maintains a BUY rating and a target price of HK$18.00, based on a 22x FY27E P/E ratio [4] - This valuation is considered justified given the median FY27E P/E of 15x for peers and Zenergy's higher profit growth outlook [4]