Equity Research: Deye Shares (605117.SH)

Rating: Outperform (Maintained)
Sector: Power Equipment / Photovoltaic Equipment
Date: September 2025
Analyst: Wang Weiqi, Xu Wenhui
Source: Guosen Securities Economic Research Institute

Executive Summary

Deye Shares (605117.SH), a leading player in the hybrid inverter and energy storage sector, has demonstrated resilient financial performance in the first half of 2025, driven primarily by the robust expansion of its energy storage business. In 2Q25, the company reported a net profit attributable to shareholders of RMB 817 million, representing a year-on-year (YoY) increase of 2% and a quarter-on-quarter (QoQ) increase of 16%. For the first half of 2025 (1H25), total revenue reached RMB 5.53 billion (+16.6% YoY), while net profit amounted to RMB 1.522 billion (+23% YoY). The company maintained strong profitability metrics, with a gross margin of 37.5% in 1H25 (+0.3 percentage points YoY) and a net profit margin of 27.5% (+1.5 percentage points YoY).

The core investment thesis for Deye Shares remains anchored in the rapid growth of its energy storage inverter shipments and the successful diversification into energy storage battery packs. In 1H25, energy storage inverter shipments surged by 48% YoY to 316,000 units, with commercial and industrial (C&I) storage showing particular momentum. Concurrently, the energy storage battery pack business generated RMB 1.422 billion in revenue (+86% YoY), establishing a significant second growth curve. While the environmental appliance segment (dehumidifiers and heat exchangers) faced headwinds due to weather anomalies and softened downstream demand, the strength of the core PV and storage businesses effectively offset these declines.

Looking ahead, we anticipate sustained growth driven by rising demand for C&I storage applications in Europe and continued vitality in household and C&I storage markets across emerging economies. We project full-year 2025 energy storage inverter shipments to reach 700,000–750,000 units (+30%–39% YoY) and energy storage battery pack revenue to range between RMB 3.0–3.5 billion (+22%–43% YoY).

To align employee interests with long-term corporate goals, Deye Shares has unveiled an Employee Stock Ownership Plan (ESOP). The plan allows up to 800 employees to subscribe to approximately 1.9072 million shares (0.21% of total share capital) at a price of RMB 30.19 per share. The performance target is set at a deducted non-recurring net profit of RMB 3.1 billion for 2025, signaling management’s confidence in future earnings stability.

Based on our updated financial models, we forecast net profits of RMB 3.206 billion, RMB 3.533 billion, and RMB 3.895 billion for 2025, 2026, and 2027, respectively, corresponding to YoY growth rates of 8.3%, 10.2%, and 10.3%. At the current share price of RMB 76.50, the stock trades at forward P/E multiples of 22x, 20x, and 18x for 2025–2027. Given the company’s solid competitive position, diversified product portfolio, and consistent earnings growth trajectory, we maintain our Outperform rating.

Key Takeaways

1. Financial Performance: Resilient Growth Amidst Mixed Sector Dynamics

Deye Shares delivered a solid financial performance in the first half of 2025, characterized by steady top-line growth and improved bottom-line efficiency. The company’s ability to maintain high margins despite competitive pressures in the inverter industry underscores its strong brand equity and cost control capabilities.

1.1 Half-Year 2025 Results Overview

• Revenue: Total revenue for 1H25 stood at RMB 5.53 billion, marking a 16.6% YoY increase. This growth was primarily fueled by the energy storage segment, which compensated for weaknesses in other business lines.
• Net Profit: Net profit attributable to shareholders reached RMB 1.522 billion, a 23% YoY increase. The outperformance of net profit growth relative to revenue growth indicates operational leverage and improved product mix.
• Profitability Metrics:
  • Gross Margin: Achieved 37.5% in 1H25, an improvement of 0.3 percentage points (pct) YoY. This stability is notable given the typical price erosion seen in the PV inverter market.
  • Net Profit Margin: Reached 27.5%, up 1.5 pct YoY, reflecting effective expense management and favorable foreign exchange impacts or lower raw material costs.

1.2 Second Quarter 2025 Sequential Improvement

The second quarter showed accelerated momentum compared to the first quarter, suggesting strengthening demand trends as the year progressed.

• Q2 Revenue: RMB 2.97 billion, up 4% YoY and 15.6% QoQ.
• Q2 Net Profit: RMB 817 million, up 2% YoY and 16% QoQ.
• Q2 Margins:
  • Gross Margin: 37.7%, flat YoY but up 0.5 pct QoQ.
  • Net Profit Margin: 27.5%, down 0.5 pct YoY but flat QoQ. The slight YoY decline in net margin may be attributed to increased R&D investments or sales expenses associated with market expansion, though it remains at a historically high level.

Source: Company Announcements, Wind, Guosen Securities Economic Research Institute

2. Core Business Driver: Energy Storage Segment Explosion

The energy storage business has emerged as the primary engine of growth for Deye Shares. The company has successfully capitalized on the global transition towards decentralized energy resources, particularly in emerging markets and Europe. The dual strategy of expanding inverter shipments and integrating battery pack solutions has created a synergistic growth model.

2.1 Energy Storage Inverters: Volume Surge and Product Mix Optimization

Deye’s energy storage inverters continue to gain market share globally. The company’s hybrid inverters are highly regarded for their reliability and compatibility with various battery chemistries, making them a preferred choice in off-grid and weak-grid regions.

• 1H25 Shipments: Total energy storage inverter shipments reached 316,000 units, a substantial 48% YoY increase.
  • Household Storage: Accounted for 273,000 units, remaining the bulk of the volume.
  • Commercial & Industrial (C&I) Storage: Reached 43,000 units. While smaller in volume compared to household units, this segment represents a higher value-add opportunity and is growing rapidly.
• Q2 2025 Estimates: We estimate Q2 shipments at 184,000 units, representing a 39% YoY increase and a 39% QoQ increase.
  • Household Storage: 157,000 units.
  • C&I Storage: 27,000 units.
  • Mix Shift: The proportion of C&I storage shipments rose to approximately 15% in Q2, an increase of 2.5 pct QoQ. This shift is positive for average selling prices (ASP) and overall margin profile, as C&I systems typically command higher margins due to complex technical requirements and service components.

Outlook for Full Year 2025:
Driven by the increasing adoption of C&I storage solutions in Europe—supported by favorable regulatory frameworks and high electricity prices—and sustained demand for household storage in emerging markets (such as South Africa, Southeast Asia, and Latin America), we project full-year 2025 energy storage inverter shipments to land between 700,000 and 750,000 units. This implies a YoY growth rate of 30%–39%.

2.2 Energy Storage Battery Packs: A New Revenue Pillar

Deye has strategically expanded into the battery pack segment, offering integrated solutions that enhance customer stickiness and capture more value from the storage ecosystem. This vertical integration allows the company to offer "one-stop" solutions, reducing installation complexity for distributors and end-users.

• 1H25 Performance: Revenue from energy storage battery packs totaled RMB 1.422 billion, surging 86% YoY.
• Profitability: The gross margin for this segment stood at 35% in 1H25. This is a healthy margin for battery assembly and packaging, indicating effective supply chain management and pricing power.
• Q2 2025 Estimates: We estimate Q2 battery pack revenue at RMB 740 million, up 56% YoY and 9% QoQ. The sequential growth, albeit slower than the YoY rate, suggests a stabilizing production and delivery rhythm after a strong start to the year.

Outlook for Full Year 2025:
As the company deepens its channel penetration and bundles batteries with inverters more aggressively, we expect the battery pack business to continue its robust expansion. We forecast full-year 2025 revenue for this segment to reach RMB 3.0–3.5 billion, representing a YoY growth of 22%–43%. The wide range reflects the variability in raw material lithium prices and the pace of channel inventory restocking in key markets.

Source: Company Data, Guosen Securities Estimates

3. Other Business Segments: Divergent Trends

While the energy storage segment shines, other parts of Deye’s portfolio exhibit mixed performance, reflecting broader macroeconomic and environmental factors.

3.1 String Inverters: Steady Growth

The string inverter business, traditionally a cornerstone of Deye’s operations, continues to grow steadily, benefiting from the global expansion of distributed photovoltaic (PV) systems.
* 1H25 Shipments: 309,000 units, up 21% YoY.
* Analysis: This growth aligns with the global trend of increasing distributed PV capacity. Although the growth rate is lower than that of storage inverters, it provides a stable cash flow base. The company’s focus on improving the integration level of its inverters helps maintain cost competitiveness.

3.2 Microinverters: Significant Contraction

The microinverter segment faced considerable headwinds in the first half of the year.
* 1H25 Shipments: 139,000 units, down 43% YoY.
* Analysis: The decline is likely attributable to intense competition in the microinverter market, particularly from established players in North America and Europe, as well as potential inventory corrections in key overseas markets. Additionally, the shift in consumer preference towards hybrid systems with storage capabilities may have dampened pure microinverter demand in some segments. We expect this segment to stabilize rather than grow significantly in the near term.

3.3 Environmental Appliances: Weather and Demand Headwinds

Deye’s legacy business in environmental appliances, specifically dehumidifiers and heat exchangers, experienced revenue contractions due to external factors.

• Dehumidifiers:
  • 1H25 Revenue: RMB 407 million, down 10% YoY.
  • Drivers: The primary cause was the shortening of the "Plum Rain" (Meiyu) season in key domestic markets, which directly reduces consumer demand for dehumidification products. Additionally, increased uncertainty in export markets, potentially due to trade barriers or logistical challenges, contributed to the decline.
• Heat Exchangers:
  • 1H25 Revenue: RMB 870 million, down 18% YoY.
  • Drivers: This decline is mainly due to shrinking demand from downstream customers. The HVAC and industrial cooling sectors may be experiencing a slowdown in capital expenditure, affecting orders for heat exchange components.

These declines highlight the cyclical nature of Deye’s non-core businesses and underscore the importance of the energy storage transition in diversifying the company’s revenue streams away from weather-dependent and cyclical industrial goods.

4. Corporate Governance: Employee Stock Ownership Plan (ESOP)

In a move to strengthen employee cohesion and align incentives with long-term shareholder value, Deye Shares released a draft plan for an Employee Stock Ownership Plan (ESOP).

• Plan Details:
  • Participants: Up to 800 employees, covering core management and technical staff.
  • Share Volume: Not exceeding 1.9072 million shares, representing 0.21% of the total share capital.
  • Subscription Price: RMB 30.19 per share. This price is significantly below the current market price (RMB 76.50), providing a substantial safety margin and incentive for employees.
  • Share-based Payment Expenses: Estimated at RMB 15 million for 2025 and RMB 45 million for 2026. These expenses will be amortized over the vesting period and impact the income statement, but are considered a worthwhile investment in human capital retention.
• Performance Targets:
  • The key performance indicator (KPI) for the ESOP is a deducted non-recurring net profit of RMB 3.1 billion for 2025.
  • Implication: This target serves as a strong signal from management regarding their confidence in the company’s earnings power. It also sets a clear floor for expected performance, reducing uncertainty for investors. Given our forecast of RMB 3.206 billion in net profit for 2025, this target appears achievable but challenging enough to drive operational efficiency.

The ESOP is expected to enhance team stability, reduce turnover among key talent, and foster a culture of ownership, which is critical for sustaining innovation in the fast-evolving energy storage technology landscape.

Risks / Headwinds

While Deye Shares presents a compelling investment case, several risks could impede its growth trajectory or compress valuations. Investors should carefully monitor the following factors:

1. Overseas Market Expansion Risks

Deye Shares is heavily reliant on international markets, particularly emerging economies and Europe, for its growth.
* Geopolitical Tensions: Trade policies, tariffs, or import restrictions in key markets (e.g., EU anti-subsidy investigations, US trade barriers) could disrupt supply chains or erode margins.
* Currency Fluctuations: As a significant portion of revenue is denominated in foreign currencies (USD, EUR, etc.), adverse exchange rate movements against the RMB could negatively impact reported earnings. While hedging strategies exist, they may not fully offset volatile swings.
* Regulatory Changes: Changes in local grid codes, subsidy schemes for solar/storage, or safety standards in target markets could require costly product modifications or delay market entry.

2. Downstream Demand Uncertainty

The growth of the energy storage and PV industries is closely tied to macroeconomic conditions and policy support.
* Interest Rate Environment: High interest rates in major economies can increase the cost of financing for residential and commercial solar/storage projects, dampening demand. If central banks maintain restrictive monetary policies for longer than expected, project economics may deteriorate.
* Policy Subsidy Withdrawal: Many emerging markets rely on government subsidies or net-metering policies to drive adoption. Any reduction or removal of these incentives could lead to a sudden drop in demand.
* Inventory Corrections: Channel inventory levels in overseas markets can fluctuate. If distributors overstock during periods of high demand, subsequent destocking phases can lead to temporary order cancellations or delays, causing volatility in quarterly shipments.

3. Intensifying Industry Competition

The inverter and energy storage sectors are becoming increasingly crowded.
* Price Wars: An influx of new competitors, particularly from China, has led to aggressive pricing strategies. While Deye maintains a premium brand position, sustained price competition could pressure gross margins, especially in the string inverter and microinverter segments.
* Technological Disruption: Rapid advancements in battery technology (e.g., solid-state batteries) or inverter topology (e.g., AI-driven energy management) require continuous R&D investment. Failure to keep pace with technological trends could result in product obsolescence.
* Market Share Erosion: Established global players and new entrants may compete aggressively for market share in key regions like Europe and North America, potentially limiting Deye’s ability to expand its footprint.

4. Supply Chain and Raw Material Volatility

• Component Shortages: Dependence on specific electronic components (IGBTs, chips) exposes the company to supply chain bottlenecks. Any disruption in semiconductor supply could constrain production capacity.
• Raw Material Prices: Although lithium prices have stabilized, significant fluctuations in the costs of lithium, copper, and aluminum could impact the profitability of the battery pack business and inverter manufacturing.

5. Execution Risk in New Businesses

• C&I Storage Ramp-up: While the C&I storage segment is growing, it involves more complex project development, installation, and after-sales service requirements compared to household units. Execution missteps in this higher-value segment could damage reputation and margins.
• Integration Challenges: Successfully integrating the battery pack business with the inverter business requires seamless operational coordination. Any inefficiencies in this integration could dilute the expected synergies.

Rating / Sector Outlook

Sector Outlook: Positive with Structural Growth Tailwinds

The global energy transition continues to provide a robust tailwind for the photovoltaic and energy storage sectors. Several structural trends support a positive outlook for the industry:

1. Energy Security and Independence: In the wake of geopolitical instability, many countries are prioritizing energy independence, accelerating the deployment of renewable energy and storage solutions to reduce reliance on imported fossil fuels.
2. Cost Competitiveness: The levelized cost of energy (LCOE) for solar plus storage has reached parity with or become cheaper than traditional grid electricity in many regions, driving organic demand beyond subsidies.
3. Grid Modernization: As renewable penetration increases, grid stability becomes a concern. Energy storage systems are increasingly viewed as essential infrastructure for grid balancing, frequency regulation, and peak shaving, creating new revenue streams for storage operators.
4. Emerging Market Leapfrogging: Developing nations with unreliable grid infrastructure are adopting off-grid and hybrid solar-storage solutions at an accelerated pace, viewing them as a more reliable and cost-effective alternative to grid extension.

Within this broader context, companies with strong brand recognition, diversified product portfolios, and established distribution channels—such as Deye Shares—are well-positioned to capture a disproportionate share of this growth. The shift from pure PV inverters to integrated storage solutions is a key differentiator, and Deye’s early mover advantage in hybrid inverters positions it favorably.

Valuation and Peer Comparison

We compare Deye Shares with two key peers in the Chinese inverter and storage sector: Sungrow Power Supply (300274.SZ) and Shenghong Shares (300693.SZ).

Source: Wind, Guosen Securities Economic Research Institute (Data as of Sept 8, 2025)

Valuation Analysis:
* Relative Valuation: Deye Shares trades at a 2025E P/E of 21.6x, which is slightly higher than Sungrow (20.3x) but lower than Shenghong (22.2x). Given Deye’s higher growth rate in the energy storage segment compared to the more mature Sungrow, and its superior profitability margins compared to many peers, this valuation appears reasonable.
* PEG Ratio: With an expected net profit growth of ~8-10% in the near term, the PEG ratio is around 2.0-2.5. While not cheap, it reflects the quality of earnings and the strong balance sheet. As the C&I storage business scales, margins may expand, potentially justifying a multiple re-rating.
* Historical Context: The current P/E multiple is significantly lower than the historical averages seen during the peak of the PV boom in 2021-2022, suggesting that much of the downside risk from competition has been priced in.

Investment Rating: Outperform (Maintained)

We maintain our Outperform rating on Deye Shares. The company’s strategic pivot towards energy storage, particularly the high-growth C&I segment, combined with its resilient financial performance and strong cash flow generation, supports a positive outlook. The introduction of the ESOP further aligns management interests with shareholders. While risks related to overseas markets and competition persist, Deye’s diversified geographic presence and product mix provide a buffer against sector-specific volatility.

Investment View

1. Core Investment Logic

Our bullish stance on Deye Shares is underpinned by three primary pillars:

A. Structural Growth in Energy Storage

The global energy storage market is in the early stages of a multi-year supercycle. Deye Shares is uniquely positioned to benefit from this trend due to:
* Product Leadership: Its hybrid inverters are technically superior in handling off-grid and weak-grid conditions, a critical feature in many emerging markets.
* Channel Depth: The company has built an extensive distribution network in high-growth regions (Africa, Southeast Asia, Latin America) that is difficult for competitors to replicate quickly.
* Vertical Integration: The expansion into battery packs allows Deye to capture more value per installation and offer bundled solutions, enhancing customer lock-in.

B. Diversification and Resilience

Unlike pure-play inverter manufacturers, Deye’s portfolio includes environmental appliances and a mix of inverter types (string, micro, hybrid). This diversification:
* Smooths Revenue Volatility: When PV demand slows, storage or appliance demand may hold up, and vice versa.
* Mitigates Regional Risk: Exposure to both developed (Europe) and emerging markets reduces dependence on any single regulatory environment.
* Supports Cash Flow: The mature appliance and string inverter businesses generate steady cash flows that fund R&D and expansion in high-growth storage segments.

C. Strong Financial Health and Operational Efficiency

• High Margins: Deye consistently delivers gross margins above 37% and net margins above 27%, outperforming many peers. This indicates strong pricing power and efficient cost management.
• Balance Sheet Strength: The company maintains a healthy balance sheet with low debt levels and significant cash reserves, providing flexibility for M&A, capacity expansion, or weathering downturns.
• ROE Excellence: Return on Equity (ROE) remains robust, projected at 30% for 2025, demonstrating efficient use of shareholder capital.

2. Detailed Financial Forecasts and Assumptions

We have updated our financial model for Deye Shares for the years 2025–2027, incorporating the latest shipment data, margin trends, and macroeconomic assumptions.

2.1 Revenue Projections by Segment

A. String Inverters
* Assumption: Global PV installations continue to grow steadily, with distributed PV maintaining its share. Deye leverages its brand to gain modest market share.
* Forecast:
* 2025E: Sales volume of 560,000 units (+36% YoY). Revenue of RMB 850 million (+7.8% YoY).
* 2026E: Sales volume of 600,000 units (+7% YoY). Revenue of RMB 900 million (+5.4% YoY).
* 2027E: Sales volume of 650,000 units (+8% YoY). Revenue of RMB 980 million (+8.3% YoY).
* Margin: Gross margin expected to stabilize around 20.0–20.5% as competition intensifies and product maturity increases.

B. Energy Storage Inverters (Hybrid)
* Assumption: Continued strong demand in emerging markets for household storage and growing adoption of C&I storage in Europe.
* Forecast:
* 2025E: Sales volume of 740,000 units (+36% YoY). Revenue of RMB 5.04 billion (+14.2% YoY).
* 2026E: Sales volume of 820,000 units (+11% YoY). Revenue of RMB 5.74 billion (+13.8% YoY).
* 2027E: Sales volume of 900,000 units (+10% YoY). Revenue of RMB 6.30 billion (+9.8% YoY).
* Margin: Gross margin expected to remain high at 51.4–52.3%, supported by the premium nature of hybrid technology and the increasing mix of higher-margin C&I units.

C. Microinverters
* Assumption: Market stabilization after a period of decline. Limited growth due to saturation and competition.
* Forecast:
* 2025E: Sales volume of 340,000 units (-19% YoY). Revenue of RMB 200 million (-41.7% YoY).
* 2026E: Sales volume of 350,000 units (+3% YoY). Revenue of RMB 210 million (+4.2% YoY).
* 2027E: Sales volume of 350,000 units (0% YoY). Revenue of RMB 210 million (0% YoY).
* Margin: Gross margin projected at 33.3–39.1%, reflecting potential price adjustments to clear inventory and regain competitiveness.

D. Energy Storage Battery Packs
* Assumption: Rapid growth driven by bundle sales and expanding channel partnerships.
* Forecast:
* 2025E: Revenue of RMB 3.32 billion (+35.5% YoY).
* 2026E: Revenue of RMB 4.00 billion (+20.4% YoY).
* 2027E: Revenue of RMB 4.50 billion (+12.5% YoY).
* Margin: Gross margin expected to stabilize at 35.0%, assuming stable lithium prices and efficient scale-up of assembly operations.

E. Heat Exchangers
* Assumption: Modest recovery or stabilization as downstream demand normalizes.
* Forecast:
* 2025E: Revenue of RMB 1.87 billion (-4.4% YoY).
* 2026E: Revenue of RMB 1.90 billion (+1.7% YoY).
* 2027E: Revenue of RMB 1.90 billion (0% YoY).
* Margin: Low margin business, projected at 12.0–12.3%.

F. Dehumidifiers
* Assumption: Slow growth driven by product upgrades and gradual market expansion.
* Forecast:
* 2025E: Revenue of RMB 1.01 billion (+4.0% YoY).
* 2026E: Revenue of RMB 1.10 billion (+9.1% YoY).
* 2027E: Revenue of RMB 1.20 billion (+9.1% YoY).
* Margin: Gross margin projected to decrease slightly to 30.0–33.6% due to competitive pricing.

G. Other Businesses
* Forecast:
* 2025E: Revenue of RMB 370 million (+35.9% YoY).
* 2026E: Revenue of RMB 350 million (-6.3% YoY).
* 2027E: Revenue of RMB 350 million (0% YoY).
* Margin: Gross margin projected at 29.4–30.0%.

2.2 Consolidated Financial Forecast

Source: Guosen Securities Economic Research Institute Estimates

2.3 Expense and Tax Assumptions

• Sales Expense Ratio: Expected to decrease slightly from 2.6% in 2024 to 2.5% in 2025, 2.4% in 2026, and 2.3% in 2027, reflecting economies of scale as revenue grows faster than sales overhead.
• Administrative Expense Ratio: Projected to decline from 2.4% in 2024 to 2.3% in 2025, 2.2% in 2026, and 2.1% in 2027, due to improved operational efficiency.
• R&D Expense Ratio: Maintained at a high level to support innovation, estimated at 4.8% in 2025, 4.6% in 2026, and 4.5% in 2027. This commitment to R&D is crucial for maintaining technological leadership.
• Income Tax Rate: Assumed to remain stable at 13%, reflecting the company’s status as a high-tech enterprise eligible for preferential tax treatments in China.

3. Valuation Methodology

We employ a combination of Relative Valuation (P/E) and Discounted Cash Flow (DCF) analysis to derive our target view.

• Relative Valuation: Based on the peer comparison above, Deye Shares trades at a 2025E P/E of 21.6x. Given its superior growth profile in the high-margin storage segment and strong ROE, we believe a P/E range of 20–25x is justified. At the current price of RMB 76.50, the stock is at the lower end of this range, offering an attractive entry point.
• DCF Analysis: Using a weighted average cost of capital (WACC) of 8.5% and a terminal growth rate of 2.0%, our DCF model yields an intrinsic value consistent with the current market capitalization, suggesting the stock is fairly valued to slightly undervalued given the upside potential in the C&I storage segment.

4. Strategic Recommendations for Investors

• Long-Term Hold: For institutional investors with a long-term horizon, Deye Shares represents a high-quality compounder in the clean energy space. The structural shift towards storage provides a multi-year growth runway.
• Monitor Quarterly Shipments: Key catalysts for stock price movement will be quarterly shipment data, particularly for C&I storage inverters and battery packs. Beat-and-raise scenarios in these segments could drive multiple expansion.
• Watch Margin Trends: Closely monitor gross margin trends in the battery pack business. Any significant deviation from the 35% benchmark could signal supply chain issues or pricing pressure.
• ESOP Execution: Track the implementation of the ESOP and the company’s ability to meet the RMB 3.1 billion profit target. Successful achievement will validate management’s guidance and boost investor confidence.

5. Conclusion

Deye Shares has successfully navigated the transition from a traditional inverter manufacturer to a comprehensive energy storage solutions provider. The strong performance in 1H25, driven by a 48% surge in storage inverter shipments and an 86% jump in battery pack revenue, validates this strategic pivot. The company’s ability to maintain high margins amidst competitive pressures demonstrates its operational excellence and brand strength.

While headwinds in the microinverter and environmental appliance segments persist, they are outweighed by the robust growth in the core storage business. The introduction of the ESOP further solidifies the company’s commitment to sustainable growth and employee alignment.

With a projected net profit growth of 8–10% annually over the next three years and a reasonable valuation multiple, Deye Shares offers an attractive risk-reward profile. We recommend investors accumulate shares on weakness, targeting a long-term holding period to capture the full benefits of the global energy storage boom.

Final Rating: Outperform

Appendix: Detailed Financial Statements

Balance Sheet Forecast (RMB Million)

Income Statement Forecast (RMB Million)

Cash Flow Statement Forecast (RMB Million)

Key Financial Ratios

Disclaimer

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