Investment Rating - Investment Rating: Buy (Maintained) [1] Core Views - The company achieved robust growth in H1 2025, with revenue of 5.535 billion yuan, up 16.58% year-on-year, and a net profit of 1.522 billion yuan, up 23.18% year-on-year [5] - The company's inverter business generated revenue of 2.644 billion yuan in H1 2025, a year-on-year increase of 13.90%, while the energy storage battery pack business saw a significant revenue increase of 85.80% year-on-year [6] - The company is expected to benefit from strong demand in emerging markets, particularly in the industrial storage sector, which is anticipated to be a key growth driver [7] Financial Performance - For H1 2025, the company reported a net profit of 1.522 billion yuan, with a net profit margin of 27.5% [5] - The company forecasts net profits of 3.550 billion yuan and 4.394 billion yuan for 2025 and 2026, respectively, with a projected P/E ratio of 16x for 2025 [8] - The company's revenue is expected to grow from 11.206 billion yuan in 2024 to 21.203 billion yuan in 2027, reflecting a compound annual growth rate (CAGR) of 17.4% [11] Market Position and Strategy - The company has established a strong presence in emerging markets, particularly in Africa and Southeast Asia, with a focus on modular energy storage solutions [7] - The company is actively expanding its production capacity in Malaysia to mitigate uncertainties related to U.S. trade policies [7] - The company’s product offerings include a comprehensive range of solutions for residential, industrial storage, and large-scale energy storage applications [6]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 82.95 [6][8]. Core Insights - The company's inverter business is experiencing a recovery in demand in Europe and significant growth in emerging markets, demonstrating strong profitability resilience [3][4]. - The commercial storage product shipments have shown impressive year-on-year growth of 213%, with new products over 100kW being launched and gradually ramping up [4][5]. - The company is actively developing in the AIDC field, having established a research team focused on solid-state transformers [5]. Summary by Sections Inverter Business - The completion of inventory reduction in European household storage and the expansion of commercial storage are noted, with favorable policy subsidies in Eastern Europe contributing to a gradual market recovery [4]. - The company has tailored solutions for the Indonesian market, addressing its unique logistical and installation challenges, and anticipates rapid growth in shipments following the July subsidy implementation in Australia [4]. Commercial Storage - In the first half of the year, the company shipped 42,900 commercial storage inverters, marking a year-on-year increase of 213% due to the introduction of dynamic pricing mechanisms in Europe [4]. - The company aims to achieve a monthly shipment of 1,000 units by the end of the year for its new 100kW+ commercial storage inverters [4]. Battery Packs - The company reported battery pack revenue of RMB 1.422 billion in the first half of the year, reflecting an 85.8% year-on-year increase, with expectations for continued growth in Q3 [4]. - The interfaces for battery packs associated with the new 100kW+ commercial storage products are not open to external access, which is expected to drive sales of the company's supporting battery packs [4]. Employee Incentives - An employee stock ownership plan was announced, allowing up to 800 employees to subscribe to 0.21% of the company's shares at RMB 30.19 per share, with performance targets set for 2025 [5]. AIDC Development - The company is leveraging its strong technical expertise in power electronics to enter the AIDC market, with plans to launch products within approximately 18 months [5]. Profit Forecast and Valuation - The company’s projected net profits for 2025-2027 are RMB 35.73 billion, RMB 44.36 billion, and RMB 52.87 billion respectively, maintaining a target PE of 21 times for 2025 [6][11].

Investment Rating - The report maintains a "Recommended" rating for the company [5] Core Views - The company achieved significant growth in its inverter and energy storage battery segments, with a notable increase in sales and revenue [2][3] - The company reported a revenue of 5.535 billion yuan for H1 2025, representing a year-on-year increase of 16.58%, and a net profit of 1.522 billion yuan, up 23.18% year-on-year [1] - The inverter sales reached 763,800 units in H1 2025, with a revenue of 2.644 billion yuan, reflecting a year-on-year growth of 13.90% [2] - The energy storage battery segment saw a remarkable revenue increase of 85.80% year-on-year, totaling 1.422 billion yuan in H1 2025 [2] Summary by Sections Financial Performance - For H1 2025, the company reported operating income of 5.535 billion yuan, a year-on-year increase of 16.58%, and a net profit attributable to shareholders of 1.522 billion yuan, up 23.18% [1] - The second quarter of 2025 saw operating income of 2.969 billion yuan, a year-on-year increase of 3.65% and a quarter-on-quarter increase of 15.70% [1] Product Performance - The inverter segment showed stable growth, with significant sales in commercial storage products, particularly in overseas markets driven by policy support [2] - The company launched new products, including off-grid energy storage inverters and expanded its energy storage solutions [2] Future Projections - The company is expected to achieve revenues of 13.248 billion yuan, 15.975 billion yuan, and 18.937 billion yuan for 2025, 2026, and 2027 respectively, with corresponding growth rates of 18.2%, 20.6%, and 18.5% [3][4] - Net profit projections for the same years are 3.529 billion yuan, 4.206 billion yuan, and 4.982 billion yuan, with growth rates of 19.2% for both 2025 and 2026, and 18.4% for 2027 [3][4]

Company Update - The company has completed a share buyback, repurchasing 1.9072 million shares, which accounts for 0.21% of its total share capital, with a maximum price of 53.75 CNY/share, a minimum price of 49.9 CNY/share, and an average price of 52.44 CNY/share, utilizing approximately 100 million CNY in total funds (excluding transaction fees) [1] Commentary - The buyback reflects the company's confidence in future growth and emphasizes shareholder returns. The repurchased shares will be used for employee stock ownership plans or equity incentives, which may help align the interests of the company and its employees [2] - Short-term energy storage inverter shipments are expected to increase quarter-on-quarter in Q2 and Q3, with steady growth in household storage and a surge in industrial storage demand. The company anticipates a 20%-30% quarter-on-quarter increase in Q2 shipments, with industrial storage shipments projected at 25,000 to 30,000 units. Q3 shipments are also expected to maintain a quarter-on-quarter growth trend, with some markets like Ukraine experiencing a decline in demand [2] - The average power rating for the company's industrial storage products is currently 30KW, and new products with 100KW and 125KW ratings have been successfully delivered. A complete industrial storage solution (e.g., 125KW inverter + 215KWh battery pack) is valued at approximately 260,000 CNY, and the company is optimistic about increasing the proportion of industrial storage inverter shipments, which currently stands at about 12% [2] Long-term Outlook - The company maintains a strong leadership position in the user-side energy storage sector, with a comprehensive product series and rapid iteration speed. Its low-voltage solutions for household storage are competitive in emerging markets and Europe. The inverter industry is brand and channel-driven, making it difficult for other manufacturers to gain market share through price competition [3] - Market demand is driven by the urgent need for electricity in emerging markets, and as the prices of components and batteries decrease, the return on investment for household and industrial storage is improving. In Europe, the adoption of dynamic pricing is expected to significantly boost industrial storage demand, which currently has a low penetration rate [3] - The company has achieved a 20% price reduction for its newly launched energy storage inverters compared to the previous generation, with household storage inverters maintaining a gross margin of over 40% and industrial storage inverters currently at a gross margin of 60%. The company expects to maintain a gross margin level above 50% in the long term [3] Profit Forecast and Valuation - The company maintains an outperform rating, slightly lowering its profit forecasts for 2025 and 2026 by 8% and 6% to 3.4 billion CNY and 4.5 billion CNY, respectively, due to fluctuating demand in markets like Ukraine and Latin America. The target price has been reduced by 27% to 80 CNY, corresponding to 21x and 16x P/E for 2025 and 2026, indicating a 49% upside potential from the current stock price, which corresponds to 14x and 11x P/E for 2025 and 2026 [4]