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Shenzhen Inovance Technology Co Ltd Class A 300124

Morningstar Rating
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Stock XSHE Rating as of
CNY 61.42 +0.16 (0.26%)
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As of Delayed Price Open
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Company Report

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Han’s Laser and Inovance See the Start of a Rebound, but Margin Pressures and Outlook Limit Upside

Phelix Lee

We maintain our CNY 20 fair value estimate for no-moat Han’s Laser and CNY 64 fair value estimate for narrow-moat Shenzhen Inovance, ahead of both firms reporting 2023 results in April. We believe both companies are fairly valued. While Han’s Laser and Inovance benefit from their customers ramping up exports of electric vehicles, lithium batteries, and photovoltaic products, we believe margin pressures in EVs and battery equipment, and an unimpressive outlook in other sectors limit upside to the stocks.

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Price vs Fair Value

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300124 is trading within a range we consider fairly valued.
Price
CNY 61.26
Fair Value
CNY 42.00
Uncertainty
High
1-Star Price
CNY 19.30
5-Star Price
CNY 81.10
Economic Moat
Zmkbj
Capital Allocation
Ttrczdrcj

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 61.26
Day Range
CNY 60.81–61.46
52-Week Range
CNY 52.22–75.74
Bid/Ask
CNY 61.32 / CNY 61.41
Market Cap
CNY 164.27 Bil
Volume/Avg
982,600 / 14.0 Mil

Key Statistics

Price/Earnings (Normalized)
40.83
Price/Sales
6.07
Dividend Yield (Trailing)
0.59%
Dividend Yield (Forward)
0.59%
Total Yield
0.59%

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 20,000 staff, including over 4,700 research and development engineers. About 95% of Inovance’s sales are made in China. Its headquarters are in Shenzhen with a large regional office in Suzhou, and 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
20,256
Website
http://www.inovance.cn

Competitors

Valuation

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Metric
300124
ABBN
6506
Price/Earnings (Normalized)
 40.8322.1133.46
Price/Book Value
 7.267.253.99
Price/Sales
 6.072.862.77
Price/Cash Flow
 63.9920.7924.21
Price/Earnings
300124
ABBN
6506

Financial Strength

Metric
300124
ABBN
6506
Quick Ratio
 1.210.801.06
Current Ratio
 1.711.182.24
Interest Coverage
 25.6717.7719.84
Quick Ratio
300124
ABBN
6506

Profitability

Metric
300124
ABBN
6506
Return on Assets (Normalized)
 9.36%9.21%7.52%
Return on Equity (Normalized)
 18.07%28.61%14.15%
Return on Invested Capital (Normalized)
 14.75%16.80%11.11%
Return on Assets
300124
ABBN
6506
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