Great Power(300438) Ping An Securities·2024-10-25 10:00Investment Rating - The report maintains a "Recommended" rating for the company [2][4]. Core Views - The company's revenue shows signs of recovery, but profitability remains to be restored. For the first three quarters of 2024, the company achieved revenue of 5.648 billion yuan, a year-on-year decrease of 1.6%. In the third quarter, revenue was 1.875 billion yuan, with year-on-year growth of 37.4% [3][4]. - The gross margin for the first three quarters was 14.06%, down 3.82 percentage points from the same period in 2023, primarily due to a decline in the selling price and gross margin of energy storage batteries [4]. - The company is positioned as a global leader in lithium battery manufacturing, focusing on the energy storage battery sector, with solid business layouts and growth potential [5]. Summary by Sections Financial Performance - In the first three quarters of 2024, the company reported a net profit of 61 million yuan, a significant year-on-year decrease of 78.0%. The net profit for the third quarter was 19 million yuan, down 19.4% year-on-year [3][4]. - The total revenue for 2024 is projected to be 7.034 billion yuan, with a slight increase expected in subsequent years [6][8]. Market Position - The global energy storage cell shipment volume maintained an upward trend, with a 33.6% year-on-year increase in the first half of 2024. The company ranks 10th globally in energy storage cell shipment volume, holding approximately 3% market share [4][5]. - The competitive landscape in the small energy storage battery segment is intense, with the top five companies holding a combined market share of 70.3% [5]. Capacity Expansion - The company is expanding its production capacity for energy storage cells and systems, semi-solid batteries, and small power batteries, with significant investments planned for new projects [5][6]. - A new energy storage cell and system integration project is expected to have an annual capacity of 10 GWh, with a fixed asset investment of approximately 1.8 billion yuan [5]. Profitability Outlook - The company’s net profit margin for the first three quarters was 0.55%, a substantial decrease from 4.97% in the previous year, mainly due to a significant drop in gross margin and a slight increase in expense ratios [4][5]. - Future profit forecasts have been adjusted downward due to anticipated pressure on gross margins from competitive market conditions [5]. Valuation Metrics - The projected P/E ratios for 2024, 2025, and 2026 are 159.7, 47.0, and 33.2, respectively, indicating a high valuation relative to earnings [6][8]. - The company’s return on equity (ROE) is expected to improve gradually, reaching 8.1% by 2026 [8].