Core Viewpoint - The company reported a strong performance in Q1 2025, with significant growth in revenue and net profit, driven by improved profitability in consumer and energy storage sectors [1][2]. Financial Performance - Q1 2025 revenue reached 12.289 billion yuan, showing a year-on-year increase of 11.97% but a quarter-on-quarter decline of 30.74% [1]. - The net profit attributable to shareholders was 386 million yuan, up 21.23% year-on-year and 50.89% quarter-on-quarter [1]. - The non-recurring net profit was 262 million yuan, down 5.97% year-on-year and 40.70% quarter-on-quarter, primarily due to increased R&D and management expenses [1]. Profitability Metrics - Gross margin and net margin for Q1 2025 were 16.88% and 0.24%, respectively, reflecting increases of 0.92 and 0.04 percentage points year-on-year, and 3.52 and 0.42 percentage points quarter-on-quarter [2]. - The increase in margins was attributed to a higher self-supply ratio of consumer battery cells and improved operational efficiency in energy storage [2]. Consumer Business Insights - The consumer business generated 6.7 billion yuan in Q1 2025, with a gross margin of 18%-19%, an improvement compared to the full year of 2024 [2]. - The company anticipates a 10 percentage point increase in the self-supply ratio of consumer battery cells in 2025, which is expected to enhance gross margins further [2]. Energy Storage Business Insights - The gross margin for the energy storage segment improved to approximately 12% in Q1 2025, although the segment incurred a loss of about 200 million yuan, which was an increase in losses year-on-year [3]. - The energy storage utilization rate was close to 50% in Q1 2025, with expectations to reach 50%-55% in Q2 2025, indicating potential for reduced losses moving forward [3]. Profit Forecast and Valuation - The company maintains its profit forecast, expecting net profits of 2.245 billion, 2.776 billion, and 3.273 billion yuan for 2025-2027 [4]. - The target price for the company is set at 23.18 yuan, based on a 19 times PE ratio for 2025, reflecting a strong market position in the consumer battery sector and a solid customer base in the energy storage segment [4].

Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The company's Q1 2025 revenue reached 12.289 billion RMB, showing a year-on-year increase of 11.97% and a quarter-on-quarter decrease of 30.74%. The net profit attributable to the parent company was 386 million RMB, with a year-on-year increase of 21.23% and a quarter-on-quarter increase of 50.89% [1][2] - The improvement in profitability is attributed to enhanced profitability in consumer and energy storage sectors, while the decline in non-recurring net profit is due to increased R&D and management expenses [1][2] - The company leads in market share for consumer battery packs, with a steady increase in self-supply rate for battery cells. The power battery segment is expected to gradually increase output and reduce losses [1][2] Summary by Sections Financial Performance - In Q1 2025, the gross margin and net margin reached 16.88% and 0.24%, respectively, with year-on-year increases of 0.92 and 0.04 percentage points, and quarter-on-quarter increases of 3.52 and 0.42 percentage points. The growth in margins is mainly due to the increased self-supply ratio of consumer battery cells and improved utilization rates in energy storage [2] - The company’s operating expenses ratio was 15.50%, up 0.43 percentage points year-on-year, with variations in sales, management, R&D, and financial expenses [2] Consumer Business - The consumer business generated 6.7 billion RMB in Q1 2025, with a gross margin of 18%-19%, an improvement compared to the full year of 2024. The increase is attributed to a higher self-supply rate of consumer battery cells [3] - The company anticipates a revenue target of 8 billion RMB for 2025, with a projected increase of 10 percentage points in self-supply rate, which will further enhance gross margins [3] Power Business - The power business gross margin improved to approximately 12% in Q1 2025, although losses increased to about 200 million RMB year-on-year due to rising R&D and management expenses. The company expects utilization rates to reach 50%-55% in Q2 2025, with continued high growth in shipment volumes anticipated for the year [4] Profit Forecast and Valuation - The report maintains profit forecasts, estimating net profits attributable to the parent company for 2025-2027 at 2.245 billion, 2.776 billion, and 3.273 billion RMB, respectively. The target price is set at 23.18 RMB, based on a PE ratio of 19 times for 2025 [5][9]