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Shenzhen Inovance Technology Co Ltd Class A 300124

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Stock XSHE Rating as of
CNY 56.01 −1.93 (3.33%)
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Company Report

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Shenzhen Inovance Earnings: Overseas Business Prioritized as China Growth Slows

Phelix Lee

We lower our fair value estimate for narrow-moat Shenzhen Inovance to CNY 60 per share from CNY 64 to reflect management’s more conservative 2024 outlook and a worse-than-expected product mix due to a higher proportion of revenue from electric vehicles, which have lower profitability. We have trimmed our gross margin assumptions. We think Inovance is fairly valued as intensifying pricing pressures in the general automation and EV segments could be offset by a budding macroeconomic recovery in China.

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Price vs Fair Value

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300124 is trading at a 612% premium.
Price
CNY 57.94
Fair Value
CNY 77.00
Uncertainty
High
1-Star Price
CNY 54.00
5-Star Price
CNY 12.00
Economic Moat
Hyvxsj
Capital Allocation
Wyzywvgr

Bulls Say, Bears Say

Bulls

Inovance can win market share by integrating BST’s products into comprehensive elevator systems.

Bears

Dominance of global brands would limit Inovance’s development in heavy industries.

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News

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Trading Information

Previous Close Price
CNY 57.94
Day Range
CNY 55.87–57.65
52-Week Range
CNY 52.22–75.74
Bid/Ask
CNY 56.01 / CNY 56.02
Market Cap
CNY 150.00 Bil
Volume/Avg
11.7 Mil / 11.5 Mil

Key Statistics

Price/Earnings (Normalized)
35.09
Price/Sales
4.82
Dividend Yield (Trailing)
0.77%
Dividend Yield (Forward)
0.77%
Total Yield
0.77%

Company Profile

Founded in 2003 by a group of ex-engineers from Huawei and Emerson, Shenzhen Inovance Technology develops and manufactures components used in elevators, automation equipment, robots, new energy vehicles, and railways. A partial list of products includes variable frequency drives—also known as inverters—servo systems, sensors, interfaces and motor controllers. Inovance employs about 22,000 staff, including over 5,400 research and development engineers. Almost 95% of Inovance’s sales are made in China. Its headquarters are in Shenzhen with a large regional office in Suzhou; these major offices are supported by over 10 branches across China.
Sector
Industrials
Industry
Electrical Equipment & Parts
Stock Style Box
Large Growth
Total Number of Employees
23,685
Website
http://www.inovance.cn

Competitors

Valuation

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Metric
300124
6954
SU
Price/Earnings (Normalized)
 35.0929.5728.24
Price/Book Value
 6.132.444.80
Price/Sales
 4.825.253.59
Price/Cash Flow
 49.6125.6323.31
Price/Earnings
300124
6954
SU

Financial Strength

Metric
300124
6954
SU
Quick Ratio
 1.214.270.90
Current Ratio
 1.717.001.22
Interest Coverage
 25.67—12.16
Quick Ratio
300124
6954
SU

Profitability

Metric
300124
6954
SU
Return on Assets (Normalized)
 9.50%10.07%6.93%
Return on Equity (Normalized)
 18.56%11.58%15.86%
Return on Invested Capital (Normalized)
 15.22%11.20%10.98%
Return on Assets
300124
6954
SU
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