Shenzhen Inovance Technology Co Ltd Class A

300124: XSHE (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥49.00	Xclyxn	Fhwqfjbbny

Inovance’s Automation More Profitable Than Expected; EV Business Grows Stronger; Raise FVE to CNY 64

Phelix Lee

Aug 24, 2022

We lift our fair value estimate on narrow-moat Shenzhen Inovance to CNY 64 per share from CNY 60 after adjusting several noncore items and increasing 2022 gross margin estimate due to better-than-expected profitability in automation and industrial robots segments. The stock is trading at 34 times 2023 adjusted P/E. Inovance is fairly valued, in our view, but there are chances of overshoot if the Chinese government rolls out tangible policies to support consumption and investments.

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