Summary of the Conference Call for HeMai Co., Ltd. Company Overview - **Company Name**: HeMai Co., Ltd. (禾迈股份) - **Industry**: Power production and supply - **Headquarters**: Hangzhou, Zhejiang, China - **Founded**: 2012 - **IPO**: Listed on the Shanghai Stock Exchange in 2021 - **Core Products**: Microinverters and electrical equipment - **Market Position**: Among the top three manufacturers in the global microinverter industry with an 8% market share in 2021 [10][11] Key Financial Performance - **Q3 2025 Performance**: - Net loss of 59 million RMB for the first nine months of 2025, compared to a net profit of 160 million RMB in H1 2024 and 246 million RMB in the first nine months of 2024 - Q3 2025 net profit turned negative with a loss of 75 million RMB, underperforming market expectations [1][2] - **Revenue Breakdown**: - Microinverters: Revenue decreased by 40% YoY to 600 million RMB, with sales volume down 30% to 540,000 units; gross margin maintained at 47-48% due to cost control and product upgrades [2] - Commercial and large-scale energy storage: Contributed 200-300 million RMB in revenue, but over 100 million RMB in projects delayed to Q4 2025 due to battery supply constraints; gross margin below 10% [2] - Household energy storage: Revenue of 100 million RMB; distributed photovoltaic projects generated 300 million RMB [2] Future Outlook - **FY25 Guidance**: - Microinverter revenue expected to reach 800 million RMB, accounting for nearly 50% of total revenue - Commercial and large-scale energy storage projected to contribute 500 million RMB, with household storage at 150 million RMB [3] - **FY26 Guidance**: - Anticipated doubling of commercial and large-scale energy storage revenue to over 1 billion RMB, driven by a 400 million RMB contract order expected to be delivered in Q1 2026 - Household storage revenue could see 3-5 times growth [3] - **Management Goals**: - Increase overseas revenue share of commercial and large-scale energy storage from under 20% in 2025 to 30% by 2026, focusing on Europe and Latin America - Household storage primarily targeting Europe and Asia-Pacific markets [3] Market Reaction - **Investor Sentiment**: Anticipated negative reaction from investors due to weak performance [4] Stock Information - **Current Stock Price**: 108.71 RMB (as of October 29, 2025) - **12-Month Rating**: Buy - **12-Month Target Price**: 127.00 RMB - **Market Capitalization**: 13.5 billion RMB (approximately 1.90 billion USD) - **52-Week Price Range**: 150.57 - 93.60 RMB [5][21] Important Metrics - **Projected Revenue Growth**: - Revenue forecast for 2025: 2.917 billion RMB - Expected net profit for 2025: 296 million RMB - Projected earnings per share (EPS) for 2025: 2.39 RMB [7] - **Valuation Ratios**: - Price-to-earnings (P/E) ratio for 2025: 45.6x - Price-to-book (P/B) ratio for 2025: 2.2x [7] Risks and Challenges - **Industry Risks**: - Lower-than-expected demand for distributed photovoltaics and energy storage - Delays in supportive policy implementation - Slower-than-expected penetration of microinverters [11] - **Company-Specific Risks**: - Slower market share expansion - Delays in product upgrades - Slow expansion of distribution networks [11] Analyst Insights - **Analyst Ratings**: The company is rated as a "Buy" with a target price reflecting a potential upside of 16.8% [9][17] - **Expected Returns**: Projected total return of 17.7%, including a dividend yield of 0.9% [9] This summary encapsulates the key points from the conference call regarding HeMai Co., Ltd., highlighting its financial performance, future outlook, market sentiment, and associated risks.

Summary of the Conference Call for HeMai Co., Ltd. Company Overview - HeMai Co., Ltd. was established in 2012 and is headquartered in Hangzhou, Zhejiang. The company went public on the Shanghai Stock Exchange in 2021. It primarily produces microinverters and electrical equipment, and is one of the top three manufacturers in the global microinverter industry with a market share of approximately 8% in 2021 [11][12]. Key Financial Performance - In the first half of 2025, HeMai's net profit decreased by 91% year-on-year to 16.3 million RMB, falling short of market expectations. The second quarter of 2025 recorded a net profit of 26.6 million RMB, recovering from a net loss of 10.4 million RMB in the first quarter [1][2]. - The gross margin for the second quarter of 2025 contracted by 11 percentage points year-on-year and 23 percentage points quarter-on-quarter to 23%, primarily due to the increased proportion of low-margin energy storage business and the decline in microinverter profit margins [2][3]. Sales and Marketing Insights - Microinverter shipments in the first half of 2025 totaled 410,000 units, with over 200,000 units shipped in the second quarter alone [2]. - Sales and marketing expenses increased by 48% year-on-year, while R&D expenses rose by 30% year-on-year. It is anticipated that SG&A and R&D expenses will remain high as the company develops new products and explores new markets [2][3]. Future Outlook - The company previously guided a microinverter shipment target of 1.2 to 1.3 million units for 2025. Management expects the energy storage business to account for 30% of revenue in 2025, up from 20% in 2024. They also anticipate that overseas sales of energy storage products will reach 60% in 2025 [3][4]. - The company maintains a "Buy" rating despite lowering earnings per share forecasts for 2025-2027 by 31%, 39%, and 37% respectively, reflecting adjustments in profit margins and shipment assumptions. The target price has been revised down from 141 RMB to 127 RMB [4][5]. Market Position and Valuation - As of August 28, 2025, HeMai's stock price was 110.46 RMB, with a market capitalization of 13.7 billion RMB (approximately 1.92 billion USD). The stock has a 52-week price range of 199.40 RMB to 93.60 RMB [5][22]. - The estimated earnings per share for 2025 is projected at 2.39 RMB, down 31% from previous estimates [5][7]. Risks and Challenges - The microinverter industry faces risks including lower-than-expected demand for distributed photovoltaics and energy storage, delayed supportive policies, and slower penetration rates of microinverters. HeMai specifically faces risks related to slower market share expansion, product upgrades, and distribution network growth [12][12]. Additional Insights - Analysts rated the industry structure as likely to improve in the next six months, with a score of 4 out of 5. The regulatory environment is also expected to improve, scoring 4 out of 5 [14]. - Positive catalysts anticipated in the next three months include further ramp-up in energy storage shipments and recovery in European demand [14]. This summary encapsulates the key points from the conference call regarding HeMai Co., Ltd., highlighting its financial performance, market outlook, and associated risks.