Inovance(SZ:300124)2024-10-24 10:13Investment Rating - The investment rating for Shenzhen Inovance Technology is "Overweight" with an attractive industry view [3][10]. Core Insights - The revenue for 3Q24 increased by 20% year-on-year to Rmb9.2 billion, aligning with market expectations, primarily driven by the NEV powertrain business [1]. - The automation and elevator business experienced a year-on-year revenue decline in 3Q, which was slightly below expectations [1]. - The net profit (NP) for 3Q was largely in line with expectations, with a midpoint of Rmb1.2 billion, reflecting a year-on-year change of -5% to +5% [1]. - Recurring net profit decreased by 4% to 15%, falling short of market expectations due to gross profit margin erosion attributed to product mix and competition, although SG&A expense control and one-off gains provided some support [1]. Revenue and Profit Forecast - The target for 4Q NP growth is set at a minimum of 14% year-on-year, which is expected to be challenging due to a lower growth base for new automation orders starting in November [2]. Valuation Methodology - The price target for Shenzhen Inovance Technology is set at Rmb64.00, based on a 30x P/E ratio for 2025 estimates, reflecting its average valuation during the 2016-2019 period [4]. Market Data - As of October 18, 2024, the share price was Rmb58.50, with a market capitalization of Rmb156.6 billion [3]. - The 52-week price range for the stock was Rmb74.94 to Rmb39.17 [3]. Analyst Coverage - The report includes contributions from analysts Sheng Zhong, Chelsea Wang, and Serena Chen, who have certified their views on the company and its securities [8].