SUNWODA(300207) ZHESHANG SECURITIES·2024-11-24 01:23Investment Rating - The investment rating for the company is "Buy" (maintained) [7] Core Views - The company is a global leader in the consumer battery pack industry, with accelerated profitability in its consumer battery business due to the scale effect of lithium batteries. The negative drag from the power battery business is expected to decrease as the downstream landscape stabilizes and orders continue to be released, leading to potential performance growth exceeding expectations [3][4]. Summary by Relevant Sections Expected Discrepancies - The market perceives that the company's power battery business is dragging down profitability, and that the consumer battery pack market has limited growth potential. However, it is anticipated that the company's profit compound growth rate can maintain above 30% over the next three years, driven by the scale effect of lithium batteries and the diminishing negative impact from the power battery business [4]. Business Growth Drivers 1. Consumer Battery Business Growth: The integration trend of CELL+PACK in the consumer battery industry is evident. The company, being a strong player in both PACK and cell preparation, is expected to enhance revenue and profitability in the consumer battery sector. The PACK business has a strong competitive edge, with leading market shares among major clients in mobile phones, computers, tablets, and wearables. The introduction of new clients and the continuous increase in market share in new fields like PCs and wearables will provide significant growth opportunities [4]. 2. Diminishing Negative Impact from Power Battery: The competitive landscape in the downstream new energy vehicle sector has stabilized, with second-tier power battery manufacturers gradually optimizing capacity and improving product technology. The company’s power battery business, which has historically been a drag on profitability, is expected to show improvement as it may be spun off into a separate listing, reducing its negative impact [4]. Catalysts and Indicators - Key indicators include the improvement in cell self-sufficiency, shipment and market share of consumer batteries, and the turnaround and growth of the company's power battery business. Catalysts for growth include exceeding expectations in cell market share, consumer battery pack business growth, and progress in turning around the power battery segment [5]. Financial Forecasts - Projected revenues for 2024, 2025, and 2026 are expected to be 56.73 billion, 66.20 billion, and 77.14 billion respectively, with year-on-year growth rates of 18.5%, 16.7%, and 16.5%. Corresponding net profits are projected to be 1.62 billion, 2.35 billion, and 2.98 billion, with price-to-earnings ratios of 25.88, 17.85, and 14.12 respectively [10][12]. Unique Insights - The report highlights a deeper understanding of the company's competitive advantage in consumer batteries, emphasizing the shift towards a CELL+PACK integrated supply model. This transition is crucial as it allows the company to leverage its manufacturing capabilities and market relationships effectively, positioning it favorably against competitors [6][9].