Inovance(SZ:300124) Huachuang Securities·2024-04-27 23:31Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 72 yuan, compared to the current price of 59.29 yuan [1]. Core Insights - The report focuses on the electric drive system of new energy vehicles, analyzing the core driving factors of the industry in terms of "volume, price, and profit" [5][6]. - The company has successfully transitioned from losses to profits and is positioned as a leader in the electric drive sector, leveraging its industrial control technology and stable funding from its automation segment [6][19]. Summary by Sections Electric Drive System: Understanding "Volume, Price, Profit" - The electric drive system consists of the drive motor, motor controller, and transmission assembly, with auxiliary components known as the "small three electrics" [13][17]. - The cost of the electric drive system is second only to the battery in the overall vehicle cost structure, accounting for approximately 13% of the total cost [13]. Volume: High-end New Energy Vehicle Sales and Motor Usage - The penetration rate of new energy vehicles in C-class cars is currently at 26%, indicating significant growth potential [19]. - The average number of motors per vehicle has increased, with dual-motor configurations gaining popularity, especially in high-end models [22][23]. Price: Moving Towards Integrated Solutions - The industry is shifting towards integrated "N-in-1" products, which combine multiple components to enhance performance, reduce costs, and simplify the supply chain [24][25]. - The proportion of "three-in-one" electric drive systems has risen to 61.5% in 2022, with expectations for continued growth in 2024 [26][27]. Profit: Technological Transformation and Domestic Substitution - The report highlights advancements in motor technology, including flat wire and oil cooling, which improve efficiency and reduce costs [30][31]. - The penetration rates of new technologies in electric motors and controllers are increasing, contributing to improved profitability for the company [30]. Company Performance and Forecast - The company is projected to achieve revenues of 379.3 billion, 464.7 billion, and 569.2 billion yuan from 2024 to 2026, with net profits of 60.4 billion, 73.4 billion, and 89.4 billion yuan respectively [6][7]. - The earnings per share (EPS) are expected to grow from 2.25 yuan in 2024 to 3.34 yuan in 2026, reflecting the company's strong market position and growth potential [6][7].