Yuneng Technology (SH:688348) Changjiang Securities·2024-11-07 06:20Investment Rating - The investment rating for the company is "Buy" and is maintained [4]. Core Views - The company reported a revenue of 1.533 billion yuan for the first three quarters of 2024, representing a year-on-year growth of 58.31%. However, the net profit attributable to the parent company was 149 million yuan, a decrease of 17.14% year-on-year. In Q3 2024, the revenue reached 634 million yuan, showing a year-on-year increase of 104.33% and a quarter-on-quarter increase of 34.61%. The net profit attributable to the parent company in Q3 was 62 million yuan, up 33.47% year-on-year and 28.74% quarter-on-quarter [4][5]. Summary by Sections Business Performance - The company's micro-inverter shipments are expected to remain stable quarter-on-quarter, with steady performance in both European and North American markets. The gross margin for micro-inverters is anticipated to maintain a good level. The industrial storage segment saw a significant revenue increase in Q3, primarily due to the concentration of revenue recognition from certain projects, which is expected to contribute a small amount of profit [5]. Financial Data - The company reported a Q3 expense ratio of only 10.9%, a decrease of 8.3 percentage points quarter-on-quarter, mainly due to the significant dilution effect from the expanded revenue scale. As of the end of Q3, inventory was 1.27 billion yuan, down 16% quarter-on-quarter, attributed to the continuous reduction of overseas warehouse inventory for micro-inverters and the conversion of industrial storage inventory into revenue. Consequently, the operating cash flow for Q3 was 380 million yuan, showing good performance. The contract liabilities at the end of Q3 were 60 million yuan, an increase of 67% quarter-on-quarter, reflecting the continuous growth in order scale [5]. Future Outlook - Looking ahead, micro-inverter sales in Q4 are expected to remain stable, with ongoing inventory digestion, and year-end inventory is likely to decrease to below six months. The company launched the EZHI hybrid micro-inverter for the DIY solar storage market in the first half of the year, which is expected to see rapid sales growth, contributing to performance increments. The industrial storage business is accelerating its development, with annual revenue expected to continue growing [5]. Profit Forecast - The company is projected to achieve net profits of 220 million yuan and 440 million yuan for 2024 and 2025, respectively, corresponding to price-to-earnings ratios of 40 and 20 times [5].