SolaX Power Network Technology (Zhejiang) (SH:688717) Guohai Securities·2024-06-05 12:30Investment Rating - The report initiates coverage on the company with a "Buy" rating, highlighting the potential for significant profit elasticity in the household storage segment and expected contributions from new business in industrial storage [5]. Core Insights - The global energy storage market is experiencing high demand, particularly in Europe, where household storage inventory is nearing depletion. The company is positioned as a pioneer in the European household storage market, benefiting from brand recognition and a strong market share [5]. - The company has ample cash reserves and is actively investing in new business areas, with a significant increase in R&D expenditure, indicating a strategic focus on expanding its industrial storage offerings [5]. - Revenue projections for the company are optimistic, with expected revenues of 4.372 billion, 6.023 billion, and 7.154 billion yuan for 2024, 2025, and 2026 respectively, alongside corresponding net profits [5]. Summary by Sections Company Overview - The company is one of the few in the industry with integrated R&D capabilities for energy storage inverters and batteries, having launched its first storage inverter in 2013 and its storage battery in 2018 [9][11]. - The company has established subsidiaries in multiple countries, enhancing its global presence and market reach [12][21]. Household Storage - The European household storage market is expected to see demand improvements as inventory levels decrease. The company is well-positioned to capitalize on this trend due to its established market presence [43][50]. - In 2023, global household storage installations reached 16 GWh, doubling year-on-year, with Germany and Italy leading the market [50][53]. Industrial Storage - The report anticipates a doubling of global industrial storage installations in 2024, driven by supportive policies and decreasing costs [81][83]. - The company is actively expanding its industrial storage business, which is expected to contribute significantly to future revenue growth [5][81]. Financial Analysis - The company reported a slight revenue decline in 2023, attributed to high inventory levels and falling electricity prices in Europe, but remains optimistic about future growth [32][36]. - R&D expenses have significantly increased, indicating a commitment to innovation and market expansion [36][39]. Market Outlook - The report forecasts a 20.5% and 37.1% year-on-year growth in global household storage installations for 2024 and 2025, respectively, reflecting a positive market outlook [76][78].