Envicool(002837) SINOLINK SECURITIES·2024-08-12 23:35Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [1]. Core Insights - The company achieved a revenue of 1.713 billion RMB in H1 2024, representing a year-on-year growth of 38.24%, and a net profit of 183 million RMB, up 99.63% year-on-year [1]. - The rapid growth in performance is attributed to the company's strategic focus on AI and the development of energy-saving products, particularly in the liquid cooling segment, which has seen revenues approximately double compared to the same period last year [1]. - The company is a leader in the thermal management of energy storage systems, with H1 2024 revenue from energy storage applications reaching around 600 million RMB, an increase of about 11% year-on-year [1]. Summary by Sections Revenue and Profitability - H1 2024 revenue was 1.713 billion RMB, with a 38.24% increase year-on-year; Q2 alone generated 967 million RMB, a 35.92% increase year-on-year and a 29.67% increase quarter-on-quarter [1]. - The net profit for H1 2024 was 183 million RMB, reflecting a 99.63% year-on-year growth, with Q2 net profit at 121 million RMB, up 81.86% year-on-year and 96.03% quarter-on-quarter [1]. Business Analysis - The company has capitalized on the AI industry's growth, leading to significant increases across all business segments, particularly in energy-saving products for data centers [1]. - The introduction of liquid cooling technology has been accelerated due to increased heat density in computing equipment, with related revenues approximately doubling compared to the previous year [1]. - The company has established deep collaborations with major clients across the computing and cloud sectors, enhancing its competitive edge in the liquid cooling market [1]. Financial Forecast and Valuation - Projected revenues for 2024-2026 are 4.716 billion RMB, 6.171 billion RMB, and 8.006 billion RMB, respectively, with corresponding net profits of 528 million RMB, 685 million RMB, and 882 million RMB [1]. - The expected price-to-earnings (P/E) ratios for these years are 34, 26, and 20 times, respectively [1].