Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 299.8 CNY per share based on a 40x PE for 2026 [1]. Core Viewpoints - The company is a leading player in the charging module industry, benefiting significantly from the increasing demand for high-power fast charging solutions. It has a market share of 16% in the domestic charging module market as of 2024, ranking second in the industry [6][12]. - The company has a strong R&D foundation, with over 50% of its employees dedicated to research and development, and a high R&D expense ratio of 8.3% in the first half of 2025 [6][12]. - The company is expanding into the HVDC (High Voltage Direct Current) market, leveraging its existing technology and customer relationships to capture new growth opportunities [6][12]. Summary by Sections 1. Charging Module Industry Leadership - The company has been deeply involved in the development of high-power charging modules, with a product range covering 15kW to 40kW modules, which are widely used in DC charging stations and cabinets [12][21]. - Revenue growth has been steady, with reported revenues of 9.88 billion CNY in 2022, 13.76 billion CNY in 2023, and 14.97 billion CNY in 2024, reflecting a strong market position [6][23]. - The company has faced challenges in profitability due to intense domestic price competition and a slowdown in overseas demand, but it is expected to return to growth in 2026 [6][12]. 2. Market Demand and Trends - The global demand for electric vehicles is projected to grow significantly, with an expected 27% increase in sales in 2024, driving the need for efficient charging solutions [43][44]. - The domestic market for public charging stations is expanding rapidly, with a notable increase in the number of high-power DC charging stations, which is expected to continue [48][52]. - The company is well-positioned to benefit from the increasing penetration of high-power charging modules, particularly in the electric heavy truck market [6][12]. 3. Financial Projections - The company’s net profit is projected to decline to 203.51 million CNY in 2025, followed by a recovery to 314.76 million CNY in 2026 and 507.15 million CNY in 2027, indicating a strong rebound [1]. - The report anticipates a significant increase in the company's valuation, with a PE ratio expected to drop from 48x in 2025 to 19x in 2027, reflecting improved profitability and growth prospects [1][6]. 4. HVDC Market Potential - The company is strategically positioning itself in the HVDC market, which is expected to see high growth due to increasing capital expenditures in the AIDC (Automated Industrial Data Center) sector [6][12]. - The company plans to leverage its existing technology and customer relationships to quickly enter the HVDC market, with product launches anticipated in 2026 [6][12].

Core Viewpoint - The Chinese charging industry is undergoing a technological revolution, shifting from a "price war" to a value-driven approach, with a focus on improving charging efficiency and safety standards [1][2]. Industry Development - The overall scale of charging infrastructure in China has evolved from non-existence to a balanced development of slow and fast charging, transitioning towards high-quality growth [1]. - The Ministry of Transport and ten other departments have set goals for 2027 and 2035 to enhance the integration of transportation and energy sectors, establishing a collaborative development mechanism [1][6]. Technological Advancements - The year 2024 is seen as a watershed moment for the charging industry, with significant price drops in charging modules and the introduction of mandatory CCC certification for charging equipment [2]. - Major players like BYD and Huawei have introduced megawatt-level fast charging technologies, which are expected to redefine the power ceiling for charging [3]. Safety Concerns - As charging power demands increase, especially for electric vehicles and other electric transport, safety and reliability challenges are emerging [5]. - The industry faces multiple risks, including fire hazards and emergency response difficulties in unattended scenarios, prompting the need for comprehensive safety solutions [5]. Market Opportunities - The electric heavy truck market is projected to see significant growth, with sales expected to reach 82,000 units in 2024, marking a 140% year-on-year increase [5][6]. - The demand for specialized charging infrastructure, such as fast charging and battery swapping stations, is rising due to the unique operational characteristics of heavy trucks [7]. Competitive Landscape - The charging industry is experiencing fierce competition, with price wars impacting profitability and leading to a focus on technological upgrades and market restructuring [8]. - Despite advancements in fast charging technology, there are concerns about the current capacity of fast-charging batteries to support large-scale electric vehicle deployment [8]. Challenges in Infrastructure - The construction of ultra-fast charging stations faces economic, technical, and infrastructural challenges, including high equipment costs and low utilization rates [9]. - The lack of unified technical standards and compatibility issues among different stakeholders is hindering the development of a cohesive charging network [9]. Recommendations for Development - Experts suggest establishing a collaborative ecosystem for public ultra-fast charging services, emphasizing the need for efficient use of existing infrastructure rather than blind expansion [10].

Group 1: New IPOs and Market Overview - This week, there are three new stocks available for subscription, including one from the ChiNext, one from the Sci-Tech Innovation Board, and one from the Beijing Stock Exchange [1] - The ChiNext new stock, Youyou Green Energy, has an issue price of 89.6 yuan and a price-to-earnings ratio of 15.37 times, while the Beijing Stock Exchange new stock, Jiaoda Tifa, has an issue price of 8.81 yuan and a price-to-earnings ratio of 13.42 times [2] - The Sci-Tech Innovation Board new stock, Yingshi Innovation, has become a leading global brand in panoramic cameras, holding a market share of 81.7% in 2024, meaning that 8 out of every 10 panoramic cameras sold globally will be from Yingshi [2][3] Group 2: Company Performance and Financials - Yingshi Innovation's revenue has surged from 2.041 billion yuan in 2022 to 5.574 billion yuan in 2024, with a compound annual growth rate of 65.25% [3] - The net profit attributable to the parent company increased from 407 million yuan to 995 million yuan, indicating a continuous improvement in profitability [3] - Youyou Green Energy's revenue is projected to grow from 988 million yuan in 2022 to 1.497 billion yuan in 2024, benefiting from the ongoing development of the domestic new energy vehicle and charging infrastructure industry [4] Group 3: Research and Development Focus - Yingshi Innovation has invested significantly in R&D, with expenditures of 256 million yuan, 448 million yuan, and 776 million yuan from 2022 to 2024, totaling 1.48 billion yuan, which represents 13.16% of its revenue over the last three years [2][3] - Youyou Green Energy aims to use the funds raised from its IPO for the construction of a charging module production base and a headquarters and R&D center [4][7] Group 4: Industry Trends - The charging module market is expected to see an increase of 726.60 billion watts in 2023, with Youyou Green Energy holding a market share of 10.58% [4] - The domestic new energy vehicle and charging infrastructure sectors are experiencing steady growth, which is expected to drive revenue growth for companies like Youyou Green Energy [4]