Morningstar

Gotion High-tech Co Ltd Class A 002074

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Stock XSHE Rating as of
¥21.03 +1.54 (7.90%)
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As of Delayed Price Open

Company Report

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Gotion High-tech Earnings: Decent Volume and Better Margin Lead to Profit Beat

Vincent Sun

Gotion High-tech recorded in-line revenue for the second quarter, with first-half revenue accounting for 46% of our previous forecast for the full year. Net profit for the period beat our expectation on a better margin trend. Gross margin gained 6 percentage points in the quarter from last year, despite increasing price competition. We raise our fair value estimate by 5% to CNY 18.20 from CNY 17.30 per share. Our fair value implies a forward 2025 price/earnings ratio of 49 times—fairly valued, in our view, with shares trading in 3-star territory.

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Price vs Fair Value

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002074 is trading at a 539% premium.
Price
¥19.49
Fair Value
¥88.30
Uncertainty
High
1-Star Price
¥47.81
5-Star Price
¥56.52
Economic Moat
Mddzf
Capital Allocation
Lcvpdbxq

Bulls Say, Bears Say

Bulls

The global electric vehicle market moves into high gear on wider acceptance leading to stronger sales at Gotion.

Bears

Given battery producers’ low pricing power, intensifying competition will significantly affect Gotion’s profitability, resulting in volatility and uncertainty in the earnings forecast.

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Trading Information

Previous Close Price
¥19.49
Day Range
¥19.70–21.05
52-Week Range
¥16.10–24.26
Bid/Ask
¥21.04 / ¥21.05
Market Cap
¥37.72 Bil
Volume/Avg
23.8 Mil / 12.3 Mil

Key Statistics

Price/Earnings (Normalized)
54.20
Price/Sales
1.06
Dividend Yield (Trailing)
0.51%
Dividend Yield (Forward)
0.51%
Total Yield
0.51%

Company Profile

Established in 2006 in Hefei, Anhui province, Gotion High-tech, is one of the first enterprises engaged in research, production, and sales of rechargeable lithium-ion batteries for NEVs in China. Its main products include lithium iron phosphate materials and batteries, ternary batteries, battery packs, and energy storage batteries. The products are widely used in new energy passenger vehicles, commercial vehicles, energy storage power plants, communication base stations, and so on. Gotion ranked eighth among global EV battery companies with 2% market share in 2023 in terms of installed capacity, and fifth in China with 4% market share. The company is 25%-owned by Volkswagen Group with Chairman Li Zhen holding around 7%.
Sector
Industrials
Industry
Electrical Equipment & Parts
Stock Style Box
Large Growth
Total Number of Employees
22,939
Website
https://www.gotion.com.cn

Competitors

Valuation

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Metric
002074
03931
006400
Price/Earnings (Normalized)
 54.2019.9114.24
Price/Book Value
 1.420.591.33
Price/Sales
 1.060.751.20
Price/Cash Flow
 6.518.878.49
Price/Earnings
002074
03931
006400

Financial Strength

Metric
002074
03931
006400
Quick Ratio
 0.740.600.56
Current Ratio
 0.910.870.94
Interest Coverage
 1.371.907.17
Quick Ratio
002074
03931
006400

Profitability

Metric
002074
03931
006400
Return on Assets (Normalized)
 2.28%1.18%5.34%
Return on Equity (Normalized)
 8.54%3.37%10.08%
Return on Invested Capital (Normalized)
 4.23%1.90%7.77%
Return on Assets
002074
03931
006400

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