Envicool(002837) 高盛·2024-08-14 09:58Investment Rating - The report assigns a "Buy" rating for Envicool (002837.SZ) [1][8] Core Insights - Envicool reported robust Q2 performance, aligning with its previous earnings forecast, with revenue, gross profit, EBIT, and net profit showing significant year-on-year growth of 36%, 39%, 96%, and 82% respectively [1] - The company anticipates continued strong growth in its data center (liquid cooling) temperature control business, driven by increased orders in June and July, although growth in the energy storage temperature control segment is expected to slow [1][4] - The report highlights the company's strategic focus on enhancing product value and expanding its customer base both domestically and internationally, particularly in the CPU server market [2][4] Financial Performance Summary - For Q2 2024, Envicool's financials were as follows: revenue of RMB 967 million, gross profit of RMB 311 million, EBIT of RMB 120 million, and net profit of RMB 121 million, all exceeding prior forecasts [1][4] - The gross profit margin for Q2 was 32%, with EBIT and net profit margins at 12% and 13% respectively, reflecting improvements compared to previous periods [1][4] - The company has adjusted its net profit forecasts for 2024-2030 slightly upward by 1%, with a new target price set at RMB 33.1, based on a 30x P/E ratio for 2025 [1][8] Business Segment Insights - The data center temperature control revenue grew by 86% year-on-year in the first half of 2024, driven by strong demand from domestic cloud and hosting clients, as well as telecom operators [1][2] - The liquid cooling business maintained approximately 100% year-on-year growth, supported by projects in China and Southeast Asia [1][2] - The energy storage temperature control segment saw only an 11% year-on-year increase, attributed to a high base effect from 2023 and declining prices in temperature control systems [2][4] Strategic Outlook - Envicool aims to maintain a strong R&D focus while improving operational efficiency, with plans to enhance its product offerings and expand into overseas markets [4][7] - The company is also focusing on securing service contracts for energy storage projects to drive sustainable growth [4][7]