Deye(SH:605117) Huajin Securities·2024-08-29 10:10Investment Rating - The report maintains a "Buy-A" rating for the company [1][3]. Core Views - The company has a strong market presence in emerging markets, holding the top market share in its sector. Despite a slight decline in revenue and net profit in the first half of 2024, the company is expected to benefit from its differentiated layout in emerging markets and its advantages in inverter product channels and cost control [1][3]. Financial Performance - In the first half of 2024, the company achieved revenue of 4.748 billion yuan, a year-on-year decrease of 2.97%. The net profit attributable to the parent company was 1.236 billion yuan, down 2.21%, while the net profit after deducting non-recurring gains and losses was 1.162 billion yuan, a decrease of 16.19% [1]. - The company's inverter business generated revenue of 2.321 billion yuan, a year-on-year decrease of 26.06%. The South African market, which has been affected by power shortages, saw a significant increase in photovoltaic installations, with 2.5 GW added in 2023, up 47% from 1.7 GW in 2022 [1]. - The energy storage battery pack business achieved revenue of 770 million yuan, a year-on-year increase of 74.82%, benefiting from the growing global demand for household energy storage products [1][4]. Market Position and Strategy - The company has established a strong brand and customer base in the South African market, leading to significant sales growth in energy storage inverters last year. However, sales in this segment have declined in the first half of 2024 due to reduced power shortages and increased competition [1]. - The company has successfully expanded its sales to emerging markets such as Pakistan, India, the Philippines, and Myanmar, which are experiencing rigid demand due to severe power shortages [1]. Future Outlook - The company is expected to see net profits of 2.933 billion yuan, 3.663 billion yuan, and 4.473 billion yuan for the years 2024 to 2026, respectively, with corresponding EPS of 4.6, 5.74, and 7.01 yuan [1][4]. - The report anticipates a significant increase in revenue, projecting 12.192 billion yuan in 2024, 15.240 billion yuan in 2025, and 19.050 billion yuan in 2026, reflecting a year-on-year growth of 63.0%, 25.0%, and 25.0% respectively [4][5].