Orient Securities has initiated coverage of Hakon New Energy, assigning it a “Buy” rating. The company recently released its annual report for 2024, revealing that it achieved operating revenue of 4.776 billion yuan, reflecting a remarkable year-on-year growth of 220.31%. Additionally, it recorded a net profit attributable to shareholders of 10.2961 million yuan, successfully turning a profit compared to the previous year. The net cash flow from operating activities reached 306 million yuan, marking a significant year-on-year increase of 147.79%.
Hakon New Energy has been deeply involved in the industrial drive sector, particularly focusing on high-voltage frequency converters for many years. The company has expanded its business dimensions to include <b>green energy solutions</b> (residential and commercial photovoltaic EPC, green electricity for villas), as well as <b>home energy storage</b> and photovoltaic grid-connected inverters.
<b>Midea Group</b>, as the controlling shareholder, provides comprehensive support and brand authorization to create a differentiated competitive advantage for Hakon New Energy. The brand authorization allows the company to utilize the "Midea" brand for its photovoltaic EPC, green electricity for villas, and photovoltaic grid-connected inverters, along with extensive support in research and development, manufacturing, supply chain, and global sales.
The company leverages Midea Group's digital capabilities to enhance overall operational efficiency, achieving a notable advantage in labor efficiency with a ratio of <b>2:1</b> compared to mainstream competitors. Hakon has continuously invested resources in core areas of the value chain such as research and development and manufacturing, establishing its own hardware and software systems. The company has set up two R&D bases and actively collaborates with various research institutes within Midea Group, third-party certification bodies, and academic institutions to promote product innovation and core technology development.
As new products are launched, the proportion of high-margin products is expected to increase. In response to overseas customer demands, Hakon has developed the first generation of its self-researched single-phase integrated home storage unit and the first generation of its self-researched three-phase stacked integrated unit. Furthermore, the company has successfully launched its <b>800W balcony photovoltaic solution</b>, which features a self-developed micro-inverter and utilizes flexible photovoltaic modules, allowing for easy installation and efficient power generation.
<b>Investment Recommendation</b>: With Midea providing comprehensive support, Hakon is poised to achieve differentiated breakthroughs in energy storage. We forecast revenue of <b>6.4 billion</b>, <b>8.1 billion</b>, and <b>9.9 billion yuan</b> for 2025 to 2027, with net profits attributable to shareholders of <b>100 million</b>, <b>200 million</b>, and <b>320 million yuan</b>. The expected earnings per share (EPS) are <b>0.09</b>, <b>0.18</b>, and <b>0.29 yuan</b> per share, with price-to-earnings ratios of <b>55</b>, <b>28</b>, and <b>17</b> based on the closing price on April 14, 2025. This initial coverage comes with a "Buy" rating.
<b>Risk Warning</b>: Risks include lower-than-expected demand for photovoltaic products, slower-than-anticipated new product expansion, and intensified industry competition.
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