Bank of America Securities: Ningde Era's (03750) second-quarter results are broadly in line with expectations and the target price was raised to HK$775

The Zhitong Finance App learned that Bank of America Securities released a research report stating that the target price for Ningde Era (03750) H shares was raised from HK$770 to HK$775, and the target price for Ningde Era (300750.SZ) A shares was raised from RMB 596 to RMB 599, confirming the “buy” rating. Ningde Times announced second-quarter results. Revenue for the period was RMB 148 billion, up 57% year on year, up 14% from quarter to quarter, 13% higher than the bank's forecast; gross profit margin of 23.2%, down 2.4 percentage points year on year, down 1.7 percentage points from quarter to quarter, lower than the bank's forecast of 24.8%; net profit of RMB 22.5 billion, up 37% year on year, up 9% from quarter to quarter, broadly in line with market expectations. An exchange loss of approximately RMB 1.1 billion was recorded during the period. Excluding related effects, profit for the second quarter was RMB 23.6 billion, up 58% year on year and 5% quarterly.

Bank of America pointed out that in the first half of the year, electric vehicle battery sales were 192 billion yuan, up 46% year on year, gross profit margin was 20.6%, down 1.8 percentage points year on year; energy storage system sales were 53.3 billion yuan, up 88% year on year, and gross profit margin was 24%, down 1.6 percentage points year on year. Management expects that, driven by demand for commercial vehicles and energy storage systems, demand growth will continue to be strong from the second half of the year, and the impact of export tax rebates and consumption tax will be shared between the company and customers, and profits per unit will be generally stable.

Ningde Times also announced an A-share repurchase plan of RMB 20 billion to RMB 40 billion, which is equivalent to 0.75% to 1.51% of the shares already issued. The repurchased shares will be cancelled. Bank of America fine-tuned its earnings estimates per share from 2026 to 2028 in response to the next quarter's results and increases in energy storage system shipment forecasts, down 0.8%, down 0.6%, and up 3.2%, respectively.