Inventronics (Hangzhou)(SZ:300582) Southwest Securities·2024-02-05 16:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected performance that will exceed the relevant market index by more than 20% over the next six months [12][45]. Core Viewpoints - The acquisition of Osram's DS-E business has led to increased costs, and inventory and accounts receivable impairments have negatively impacted the company's performance [1]. - The LED driver power supply industry is currently at the bottom of its cycle, with a significant reduction in inventory levels among downstream companies, which is expected to benefit the company as demand recovers [12][34]. - The company is expected to benefit from its global layout and the integration of Osram's customer base, which includes over 1,800 clients in Europe and Asia [12][34]. - The company's revenue is projected to grow significantly from 2023 to 2025, with expected revenues of 27.44 billion, 33.30 billion, and 39.93 billion respectively, alongside a recovery in net profit starting in 2024 [15][39]. Financial Forecasts and Valuation - The company is projected to report a net loss of 110 million to 210 million in 2023, with a recovery to 210 million and 270 million in 2024 and 2025 respectively [14][15]. - Earnings per share (EPS) are expected to be -0.37, 0.70, and 0.89 for the years 2023, 2024, and 2025 [15][39]. - The price-to-earnings (PE) ratio is projected to be -20.9, 11.0, and 8.7 for the same years, indicating a significant undervaluation compared to peers [39][40]. Business Segments - The company’s new energy business has shown rapid growth, achieving over 51 million in revenue in the first half of 2023, a year-on-year increase of 346.5% [34]. - The integration of Osram's DS-E business is expected to significantly boost sales in the mid and small power LED driver segments, with projected sales growth of 250% in 2023 [38][39].