Investment Rating - The report maintains an "Accumulate" rating for the company, suggesting investors pay attention to its performance [2][3]. Core Views - The company, Tianneng Power, remains a leader in the lead-acid battery sector with a robust network of over 400,000 retail outlets nationwide, ensuring a solid performance base [1][3]. - The current dividend yield is attractive, and future capital expenditures are expected to decrease, which, combined with strong cash flow from lead-acid operations, will improve overall cash flow and provide room for shareholder returns [1][3]. - The projected net profits for the company from 2024 to 2026 are estimated at 1.981 billion, 2.230 billion, and 2.385 billion RMB, reflecting year-on-year growth rates of 8.7%, 12.5%, and 7.0% respectively [1][4]. Summary by Sections Financial Performance - In H1 2024, the company's revenue increased by 20.4% year-on-year to 49.91 billion RMB, with manufacturing and trading revenues at 21.21 billion and 28.70 billion RMB, respectively [1]. - The gross profit for H1 2024 was 2.55 billion RMB, down 16.1% year-on-year, with a gross margin of 5.1%, a decline attributed to rising lead prices and an increase in lower-margin trading business [1][4]. - The net profit attributable to shareholders for H1 2024 was 0.93 billion RMB, a slight increase of 1.1% year-on-year, supported by government subsidies and derivative contract gains [1]. Competitive Advantages - The company has a strong market position in lead-acid batteries, particularly for two-wheeled vehicles, with a production capacity of 130 GWh [1]. - Tianneng Power's channel advantage and production efficiency contribute to its growing market share, with minimal impact from competitors like Yadea [1]. - The company is expanding its overseas operations, with a factory planned in Vietnam, which is expected to enhance revenue growth in Southeast Asia [1]. Capital Expenditure and Cash Flow - Capital expenditures have been high from 2021 to 2023, but are expected to decrease as the company pauses lithium battery expansion and optimizes its recycling operations [1][3]. - The company reported a dividend of 0.43 HKD per share in 2023, with a payout ratio of approximately 22%, translating to a dividend yield of 6.5% based on the closing price on September 12, 2024 [1][2].
天能动力：铅蓄业务强者恒强，资本开支有望收敛