Sungrow Power Supply Co Ltd Class A

300274: XSHE (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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Sungrow Power Supply Earnings: Larger Domestic Shipment Led to Sequential Margin Contraction

Cheng Wang

Nov 7, 2024

We maintain our fair value estimate of CNY 63 for Sungrow and consider the shares to be currently overvalued. Sungrow's third-quarter results were slightly disappointing, with adjusted operating profit dropping 11% year on year despite a 6% increase in revenue. Consequently, while keeping our revenue forecast, we have lowered our gross margin forecast by 1.2 percentage points, leading to a 6% reduction in our net profit forecast to CNY 11.6 billion for 2024. Our estimates beyond 2024 remain unchanged, as we had already factored in sequentially lower gross margins.

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Sungrow Power Supply Co Ltd Class A

Sungrow Power Supply Earnings: Larger Domestic Shipment Led to Sequential Margin Contraction

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