Damo: Ningde Era (03750) second-quarter results beat expected buybacks and positive guidance

The Zhitong Finance App learned that Morgan Stanley released a research report saying that Ningde Times (03750) announced second-quarter results after closing on Friday (24th). Net profit for the period was 22.6 billion yuan, which was better than the company's guidance of 22 billion yuan, but slightly lower than the bank's forecast of 23 billion yuan, mainly due to the bank's overestimation of interest income. Revenue for the first half of the year increased 54.8% year over year to RMB 276.9 billion, and net profit increased 42% year over year to RMB 43.3 billion. Damo believes that the scale of the newly announced A-share repurchase plan is as high as 40 billion yuan (or 5.9 billion US dollars), which is far more important than the performance itself. The repurchase of shares will be cancelled, releasing management's strong confidence in the company's intrinsic value. The bank maintained the “increase” rating of Hong Kong stocks in the Ningde Era, with a target price of HK$815.

According to the report, sales in the second quarter increased 60% year on year, and profit margins were stable. The gross profit per unit was weak due to quarterly product mix fluctuations, but the gross profit per unit of the same product was stable, and energy storage products improved even more. Management's optimistic guidance on next year's profit growth far exceeding 20% will help the market focus shift from short-term performance to increasingly clear sustainable growth in 2027.