Deye(SH:605117) Ping An Securities·2024-07-24 03:00Investment Rating - The report gives a "Buy" rating for the company, with a target price of 96.56 CNY as of July 22, 2024 [2][5]. Core Views - The company is a leading player in the household energy storage sector, with strong performance in emerging markets. It has a comprehensive product matrix covering energy storage inverters, string inverters, micro-inverters, and energy storage batteries [5][13]. - In 2023, the company achieved a revenue of 7.48 billion CNY, a year-on-year increase of 26%, and a net profit of 1.79 billion CNY, up 18% year-on-year. The first quarter of 2024 showed a revenue of 1.88 billion CNY, with a quarter-on-quarter increase of 63% [5][19]. - The company is expected to benefit from the explosive demand for household energy storage in Asia, particularly in Southeast Asia and South Africa, leading to strong performance in 2024 [5][26]. Summary by Sections Company Overview - The company was established in 2000 and listed on the Shanghai Stock Exchange in April 2021. It operates in two main segments: renewable energy and home appliances [5][13]. - The company’s major shareholders include Ningbo Meishan Bonded Port Area Aisri Investment, with a controlling stake of 35.83% held by Zhang Hejun [2][5]. Household Energy Storage - The global household energy storage market saw a significant increase in demand, with installed capacity reaching 10.4 GW in 2023, doubling from 2022. Emerging markets are expected to drive future growth [5][26]. - The company’s household energy storage products, including inverters and battery packs, generated significant revenue, with inverters alone contributing 4.43 billion CNY in 2023 [20][23]. Photovoltaic Inverters - The global photovoltaic installation growth is projected to slow down, with an expected 19% increase in 2024. However, markets in India and Pakistan are anticipated to show strong growth [5][26]. - The company’s performance in the photovoltaic inverter market is expected to improve due to its strong product performance and extensive channel layout in emerging markets [5][26]. Financial Projections - The company is projected to achieve net profits of 2.95 billion CNY in 2024, 3.69 billion CNY in 2025, and 4.39 billion CNY in 2026, with corresponding EPS of 4.63 CNY, 5.78 CNY, and 6.87 CNY [5][6]. - The report indicates that the company’s P/E ratios for the next three years are expected to be lower than the average for comparable companies, suggesting a favorable valuation [5][6].