Core Viewpoint - The report from CITIC Securities indicates that Zhengli New Energy (03677) is expected to achieve a turning point in profitability, with net profit and operating profit turning positive in 2024 and the first half of 2025, respectively. The company is projected to see significant revenue growth in the coming years, with a "buy" rating given due to strong profit growth potential and sales exceeding industry averages [1][2]. Financial Performance - In 2024, the company is expected to achieve total revenue of 4.16 billion yuan, a year-on-year increase of 10.8%, with a net profit of 90 million yuan, marking its first profit [2]. - For the first half of 2025, revenue is projected to reach 3.17 billion yuan, a year-on-year increase of 71.9%, with a net profit of 220 million yuan, and operating profit turning positive for the first time at 87.3 million yuan [2]. Sales Volume - The company has seen a significant increase in sales volume, with a year-on-year growth of 99.2% to 7.82 GWh in the first half of the year, increasing its market share from 0.03% in 2022 to 2% [3]. - Looking ahead to the second half of 2025 and 2026, the company expects continued growth in sales volume driven by new model releases, with annual sales projected to reach 18.89 GWh and 30.04 GWh, respectively, representing a year-on-year increase of 59% for both years [3]. Production Capacity - The company anticipates an increase in utilization rate to 76.2% in 2025, ensuring sufficient output for customers, with expectations of full production during peak seasons. Additionally, 10 GWh and 15 GWh of new capacity are expected to be added in 2026 and 2027, respectively [3]. Profitability - The company’s unit profitability is expected to continue rising due to increased scale and improved utilization rates. The report highlights that the reduction in R&D and management costs due to scale, along with decreased unit depreciation from higher utilization rates, are key factors driving this profitability [4]. - The company is projected to see its utilization rate increase from 62.9% in the first half of 2025 to 76.2% and 86.3% in 2026, further enhancing unit profitability [4]. Second Growth Curve - The company has achieved mass production and delivery of aviation batteries, which are expected to create a second growth curve. It is the first in China's battery industry to obtain both AS9100D aerospace quality management certification and CAAC airworthiness certification. The aviation batteries are anticipated to have higher value and profit margins compared to automotive batteries [5].

Core Viewpoint - The report from CITIC Securities indicates that Zhengli New Energy (03677) is expected to achieve positive net profit and operating profit in 2024 and the first half of 2025, marking a turning point in profitability. Revenue projections for 2025, 2026, and 2027 are 8.028 billion, 12.805 billion, and 18.215 billion yuan, with corresponding net profits of 544 million, 1.237 billion, and 1.730 billion yuan, suggesting a strong growth trajectory and a "buy" rating due to the company's superior growth rates compared to the industry [1][2]. Financial Performance - In 2024, the company is projected to achieve total revenue of 4.16 billion yuan, a year-on-year increase of 10.8%, with a net profit of 90 million yuan, marking its first profit [2]. - For the first half of 2025, revenue is expected to reach 3.17 billion yuan, a significant year-on-year increase of 71.9%, with a net profit of 220 million yuan and operating profit of 87.3 million yuan, indicating a positive trend [2]. Sales Volume and Market Share - The company has seen a 99.2% year-on-year increase in shipment volume to 7.82 GWh in the first half of the year, with market share rising from 0.03% in 2022 to 2% [3]. - Projections for 2025 and 2026 suggest annual shipments of 18.89 GWh and 30.04 GWh, respectively, reflecting a year-on-year increase of 59%, significantly outpacing the expected 17% growth in global electric vehicle sales [3]. Production Capacity and Efficiency - The company is expected to achieve a utilization rate of 76.2% in 2025, ensuring sufficient output for customers, with full production anticipated during peak seasons. An additional 10 GWh and 15 GWh of capacity are expected to be added in 2026 and 2027 to accommodate new projects [3]. - The report highlights that increased scale and utilization rates will continue to drive the company's unit profitability upward, with expectations for further reductions in R&D and management costs due to economies of scale [4]. New Growth Opportunities - The company has achieved mass production and delivery of aviation batteries, becoming the first in China's power battery industry to obtain AS9100D certification and CAAC airworthiness certification. This segment is expected to generate higher value and profit margins compared to automotive batteries, potentially creating a second growth curve for the company [5].

Core Viewpoint - The company is expected to achieve significant revenue growth and profitability in 2025, driven by new customer contracts and increased shipment volumes, with a projected revenue of 31.7 billion yuan in H1 2025, representing a year-on-year increase of 71.9% [1] Revenue and Profitability - In 2024, the company is projected to achieve total revenue of 41.6 billion yuan, a year-on-year increase of 10.8%, and a net profit of 0.9 billion yuan, marking its first profit [1] - For H1 2025, the company is expected to report a net profit of 2.2 billion yuan, with operating profit reaching 0.873 billion yuan, indicating a turnaround to profitability [1] Shipment Volume - The company experienced a 99.2% year-on-year increase in shipments in H1 2025, reaching 7.82 GWh, with market share rising from 0.03% in 2022 to 2% [1] - Projections for 2025 and 2026 indicate total shipments of 18.89 GWh and 30.04 GWh, respectively, both reflecting a year-on-year increase of 59%, significantly outpacing the expected 17% growth in global electric vehicle sales [2] Production Capacity - The company anticipates an increase in production capacity utilization to 76.2% in 2025, ensuring sufficient output to meet customer demand, with expectations of full production during peak seasons [2] - An additional 10 GWh of production capacity is expected to come online in 2026 to support new customer projects [2] Profitability Drivers - The transition to profitability is attributed to economies of scale leading to reduced R&D and management costs, alongside improved capacity utilization resulting in lower depreciation costs [2] - The company expects continued growth in unit profitability as production scales up, with capacity utilization projected to rise from 62.9% in H1 2025 to 76.2% in 2026 and 86.3% in 2027 [2] Second Growth Curve - The company has achieved mass production and delivery of aviation batteries, which are expected to generate higher value and profit margins compared to automotive batteries, potentially creating a second growth curve for the company [3] - The company is the first in China's power battery industry to obtain both AS9100D aerospace quality management certification and CAAC airworthiness certification, positioning it favorably in the aviation sector [3] Investment Outlook - Revenue projections for 2025, 2026, and 2027 are 80.28 billion yuan, 128.05 billion yuan, and 182.15 billion yuan, respectively, with net profits of 5.44 billion yuan, 12.37 billion yuan, and 17.30 billion yuan [3] - The company is expected to trade at a PE ratio of 38, 17, and 12 for the years 2025, 2026, and 2027, with valuations below the industry average, reflecting strong growth potential [3]