Shenzhen Inovance Technology Co. (.SZ)_ Nov IA order growth maintaining at +10% yoy

Company-Specific Information * Shenzhen Inovance Technology Co. (300124.SZ): The focus of the report is on Shenzhen Inovance Technology, a domestic leader in industrial automation. * Nov IA order growth: Inovance's industrial automation segment orders grew by 10% year-over-year (yoy) in November 2024, similar to the growth seen in October. * Order breakdown: The growth was driven by various end-markets including electric construction machinery, wind power, process industries, non-ferrous metal, air conditioners, rubber & plastics, etc. Battery orders remained positive yoy, while solar orders were negative yoy. * EV components: EV components orders continued to grow robustly in November. * Comparison with peers: Inovance's order growth was compared with other industrial automation peers, suggesting that the growth was more due to company-specific factors rather than a broad-based industry inflection. * Investment thesis: Goldman Sachs maintains a Buy rating on Inovance, citing its strong growth outlook driven by factors such as overseas market opportunities, potential market share gains in small/large PLC, EV component growth, and digitalization business development. * Competitive advantages: Inovance's competitive advantages include industry-leading R&D effectiveness and a comprehensive product portfolio with strong customer switching costs. * Valuation: Goldman Sachs' 12-month target price for Inovance is Rmb61.1, based on a 25x 2026E PE. Industry Information * Industrial automation market: The report discusses the industrial automation market, highlighting factors such as the growth in orders for various end-markets and the increasing demand for EV components. * Comparison with peers: The report compares Inovance's order growth with other industrial automation peers, providing insights into the company's relative performance. * Supply chain dynamics: The report mentions the ongoing destocking in Siemens' supply chain in China and the expectation of inventory normalization into 2QFY25. * Overall market sentiment: The report provides an overview of the overall market sentiment in the industrial automation sector, highlighting factors such as the growth in orders and the increasing demand for EV components.