Deye(SH:605117) HTSC·2024-07-05 06:02Investment Rating - The report upgrades the investment rating to "Buy" with a target price of RMB 94.80 [6][7]. Core Views - The company is expected to achieve a significant year-on-year increase in net profit for Q2, with estimates ranging from RMB 7.5 billion to RMB 8.5 billion, reflecting a growth of 11.10% to 25.91% compared to the previous year [1]. - The report anticipates strong growth in the overseas household market, leading to an upward revision of the net profit forecast for 2024-2026 to RMB 30.22 billion, RMB 36.05 billion, and RMB 42.83 billion respectively [1][8]. - The company has demonstrated strong channel development capabilities, capturing significant market shares in emerging markets, with over 60% in Southeast Asia and more than 60% in Pakistan [3]. Summary by Sections Financial Performance - The company expects to achieve a net profit of RMB 11.83 to RMB 12.83 billion for the first half of 2024, with a year-on-year change of -6.39% to +1.53% [1]. - Q2 net profit is projected to be RMB 7.5 to 8.5 billion, with a quarter-on-quarter increase of 73.19% to 96.28% [1]. - The average gross margin for inverter products in Q1 was 46.41%, with storage inverters at 50.19% [3]. Market Expansion - The company shipped 235,100 inverters in Q1, including 82,000 storage inverters, and expects to ship 640,000 to 650,000 inverters in Q2 [2]. - The report highlights the company's successful penetration into various overseas markets, including significant sales in Europe, Southeast Asia, and the Middle East [2][3]. Product Development - The storage battery pack business saw a revenue of RMB 884 million in 2023, a year-on-year increase of 965.43% [4]. - The company is leveraging its inverter channels to expand into the storage battery pack market, expecting substantial growth in H2 2024 [4][8]. Valuation Metrics - The report estimates the company's PE ratio for 2024 at 20 times, compared to the average PE of 19 times for comparable companies [1][8]. - The projected revenue for 2024 is RMB 12.31 billion, with a year-on-year growth of 64.62% [5].