Minsheng Securities has recently assigned a buy rating to Jinlang Technology following their research and the publication of a report titled “2024 Annual Report and 2025 Q1 Report Review: Q1 2025 Net Profit Improves Sequentially, Inverter Trend is Positive.” The report was authored by analysts Dong Yongkang, Wang Yiru, Lin Yutao, and Zhu Biye.
Jinlang Technology (300763) recently released its 2024 annual report and 2025 Q1 report on April 28, 2025. During 2024, the company achieved an operating income of 6.542 billion yuan, marking a year-on-year increase of 7.23%. However, the net profit attributable to shareholders was 691 million yuan, a decrease of 11.32% compared to the previous year. The net profit excluding non-recurring items was 637 million yuan, down 18.94% year-on-year.
In the fourth quarter of 2024, the company reported an operating income of 1.381 billion yuan, a decline of 5.40% year-on-year and 23.57% quarter-on-quarter. The net profit attributable to shareholders was 22 million yuan, down 19.99% year-on-year and 92.96% quarter-on-quarter. The net profit excluding non-recurring items was 7 million yuan, representing a year-on-year decrease of 48.39% and a quarter-on-quarter decrease of 97.72%.
In Q1 2025, the company achieved an operating income of 1.518 billion yuan, up 8.65% year-on-year and 9.92% quarter-on-quarter. The net profit attributable to shareholders surged to 195 million yuan, a remarkable increase of 859.78% year-on-year and 773.79% quarter-on-quarter. The net profit excluding non-recurring items reached 153 million yuan, reflecting an impressive year-on-year growth of 1024.38% and a quarter-on-quarter growth of 2057.02%.
The trend for the inverter business appears to be improving. In 2024, the company sold 91.29 GW of photovoltaic inverters, an increase of 22% year-on-year, generating revenue of 4.364 billion yuan with a gross margin of 19.83%. Of this, the revenue from grid-connected inverters was 3.792 billion yuan, down 6.70% year-on-year with a gross margin of 18.68%, which is a decline of 2.60 percentage points year-on-year. Revenue from energy storage inverters totaled 572 million yuan, marking a year-on-year increase of 30.37% with a gross margin of 27.48%, down 9.10 percentage points year-on-year. The slight decline in revenue from the inverter segment is primarily due to reduced new demand from clients. Additionally, to maintain market competitiveness, the company adjusted its pricing strategy for inverter products, which resulted in decreased profits. Looking ahead to 2025, demand in emerging markets is expected to remain robust, with the European market experiencing accelerated inventory depletion and a potential recovery in demand. The inverter business is showing positive trends, and the profits in Q1 2025 demonstrate significant growth both year-on-year and quarter-on-quarter, leading to optimistic expectations for the company’s future performance.
The household photovoltaic power generation systems and new energy production sectors are experiencing stable growth. The company’s distributed photovoltaic power generation business is managed by its wholly-owned subsidiary, Jinlang Smart. The new energy production business involves the development, construction, and operation of solar photovoltaic power stations to generate income. The household photovoltaic power generation system business provides design, installation, management, operation, and maintenance services related to photovoltaic stations to residents, generating service income. In 2024, both the household photovoltaic power generation system and new energy production businesses showed stable growth. The household photovoltaic power generation system business generated 1.464 billion yuan in revenue, up 22.65% year-on-year with a gross margin of 58.08%, down 1.82 percentage points year-on-year. The new energy production business achieved revenue of 617 million yuan, a significant year-on-year increase of 110.99%, with a gross margin of 52.86%, down 7.17 percentage points year-on-year.
Investment Recommendations: We expect the company’s revenue for 2025-2027 to be 9.095 billion yuan, 11.018 billion yuan, and 12.720 billion yuan, with corresponding growth rates of 39.0%, 21.1%, and 15.5%. The net profit attributable to shareholders is projected to be 1.151 billion yuan, 1.457 billion yuan, and 1.765 billion yuan for those years, with growth rates of 66.5%, 26.6%, and 21.1% respectively. Based on the closing price on April 30, the corresponding P/E ratios for 2025-2027 are 18X, 14X, and 12X. Given the positive trend in the inverter business, we maintain a “recommended” rating for the stock.
Risk Warning: Risks include lower-than-expected downstream demand and intensified market competition. The latest detailed profit forecast indicates that in the past 90 days, three institutions have rated the stock, with two assigning a buy rating and one an overweight rating. The average target price set by institutions over the last 90 days is 65.92.
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