Deye(SH:605117) Huaxin Securities·2024-09-03 06:02Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [2][3]. Core Insights - The company reported a significant quarter-on-quarter increase in performance for Q2, with emerging markets showing strong growth [2]. - In H1 2024, the company achieved operating revenue of 4.748 billion yuan, a year-on-year decrease of 2.97%, and a net profit attributable to shareholders of 1.236 billion yuan, down 2.21% year-on-year [2]. - The company's inverter business saw a revenue of 2.32 billion yuan in H1 2024, a year-on-year decline of 26.06%, but the total shipment reached 711,700 units, an increase of 8% year-on-year [2]. - The energy storage battery pack business experienced a revenue growth of 74.82% year-on-year, reaching 765 million yuan, benefiting from the rising global demand for household energy storage products [2]. Summary by Sections Financial Performance - In Q2 2024, the company achieved operating revenue of 2.864 billion yuan, a year-on-year increase of 1.98% and a quarter-on-quarter increase of 52.06%, with a net profit of 803 million yuan, up 18.97% year-on-year and 85.44% quarter-on-quarter [2]. - The gross margin for Q2 was 37.69%, and the net margin was 28.03% [2]. Business Segments - The inverter segment's revenue decreased, but shipments to emerging markets like Pakistan, Germany, Brazil, India, and South Africa showed strong performance [2]. - The energy storage inverter maintained a gross margin of 52.00%, slightly down from 54.96% in 2023 [2]. - The heat exchanger product revenue grew by 16.73% year-on-year, and dehumidifier product revenue increased by 31.98% year-on-year, driven by high temperature and humidity conditions [2]. Earnings Forecast - The company is projected to achieve revenues of 11.271 billion yuan, 15.561 billion yuan, and 19.586 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 4.49 yuan, 5.88 yuan, and 7.06 yuan [3]. - The current stock price corresponds to PE ratios of 19.8, 15.1, and 12.6 for the years 2024, 2025, and 2026 respectively, indicating a favorable outlook for the company's growth in the global solar storage market, particularly in emerging markets [3].