Core Viewpoint - Dongwu Securities research report indicates that EVE Energy has reached an operational turning point, with expectations for both volume and profit to increase in the future, leading to potential profit elasticity [1] Group 1: Production and Sales - In Q2 2025, EVE Energy shipped 27.3 GWh, representing a quarter-on-quarter increase of 30% and a year-on-year increase of 21% [1] - The capacity utilization rate reached 90% in June, with projected shipments of 130 GWh in 2025, reflecting a year-on-year growth of over 60% [1] - Shipments are expected to reach 200 GWh in 2026, with a year-on-year growth of over 50%, maintaining high growth rates into 2027 [1] Group 2: Profitability - Battery prices have bottomed out, and energy storage is operating at full production and sales [1] - With the release of popular models from Xiaopeng and Leap Motor, capacity utilization is expected to continue increasing [1] - The joint venture materials factory is anticipated to become profitable, leading to significant operational improvements in Q3 [1] Group 3: Future Outlook - The introduction of large cylindrical and large iron-lithium new products in 2026 is expected to drive volume growth, particularly in overseas markets [1] - The energy storage business is projected to contribute 7 billion in profits, with profit elasticity expected in 2026-2027 [1] - EVE Energy is focusing on differentiated products, with full orders for large cylindrical and large iron-lithium batteries, entering a harvest period in 2026 [1] Group 4: Financial Projections - The net profit attributable to shareholders for 2025 is maintained at 4.7 billion, reflecting a year-on-year increase of 16% [1] - Given the rapid growth in shipments, a valuation of 25x is assigned for 2026, corresponding to a target price of 92 yuan, maintaining a "buy" rating [1]

Core Insights - The company reported Q2 performance exceeding market expectations, with net profit for H1 ranging from 300 to 360 million yuan, representing a year-on-year increase of 79% to 115% [1] - Q2 net profit reached 160 to 220 million yuan, showing a year-on-year growth of 63% to 125% and a quarter-on-quarter increase of 11% to 54% [1] - The company is expanding into new fields with the launch of semi-solid cylindrical products, anticipating significant growth in the lithium battery sector [2] Financial Performance - H1 net profit attributable to shareholders is projected at 300 to 360 million yuan, with a non-recurring net profit of 320 to 380 million yuan, marking a year-on-year increase of 156% to 204% [1] - Q2 shipments reached nearly 180 million units, a quarter-on-quarter increase of 30%, with profit per unit rising to 0.6 yuan [1] - The lithium battery segment contributed over 100 million yuan in profit during Q2, with a unit profit increase of 50% to 60% [1] Product Development - The company launched a new semi-solid cylindrical product in July, featuring an energy density of 350 Wh/kg and a cycle life exceeding 8000 cycles, with mass production validation expected by year-end [2] - Plans for 2027 include mass production of a solid-state cylindrical battery with an energy density of 500 Wh/kg [2] - The company’s new product lines, including BBU, robotics, and eVTOL, are expected to ramp up production between 2026 and 2027, with significantly better profitability than traditional sectors [2] Other Business Segments - The LED business showed strong profitability, contributing over 50 million yuan in Q2, with a quarter-on-quarter increase of 15% [2] - The metal logistics segment contributed 40 million yuan in Q2, with stable cash flow expected to continue [2] Earnings Forecast and Investment Rating - The company has revised its net profit forecasts for 2025-2027 to 750 million, 1 billion, and 1.31 billion yuan, respectively, reflecting year-on-year growth of 55%, 33%, and 31% [2] - The corresponding price-to-earnings ratios are projected at 21x, 16x, and 12x, with a target price of 20 yuan based on a 30x PE for 2025, maintaining a "buy" rating [2]