Inovance'searningstogrowby10%YBloombergconsensusestimateofRmb1.36bn,despite1.2ppYoYGPMaxlebusinessgrewfasterthantheothers.Assuch,wesee2Q25resultsasboundofits2025earningsgrowthgexpectitscontinuouslyimprovingNEVE-axleproficoncerns;and3)wehaveconfidenceinsustainabilitydrivenbyitsclearbusinessroadmap,includingthehumanoidrobotbusiness.EarningsSummaryNetProfitDilutedEPS2023A4,7422024A4,286-10.140.92025E5,3622026E6,6552.4724.72027E8,1753.0364.0Source:PoweredbydataCentralShort-TermView:UpsideTargetpricefromRmb70.000ExpectedsharepricereturnExpecteddividendyieldExpectedtotalreturnMarketCapRmb176,299M2300124.SZ:FiscalyearePrice:Rmb65.410;TP:Rmb75.000;MarketCap:Rmb176,299m;Recomm:BuyProfit&Loss(Rmbm)2027EValuationratiosSalesrevenue30,42037,04146,47755,69364,960PE(x)40.926.521.5-20,215-26,409-33,257-39,667-45,894PB(x)4.74.0Grossprofit19,065EV/EBITDA(x)23.1GrossMargin(%)28.728.428.829.3FCFyield(%)EBITDA(Adj)9,273Dividendyield(%)EBITDAMargin(Adj)(%)14.3Payoutratio(%)Depreciation-426-594-827-1,11-1,423ROE(%)21.4Amortisation-174-190-105-114-124Cashflow(Rmbm)EBIT(Adj)7,726EBITDA4,1894,4945,7157,2969,149EBITMargin(Adj)(%)11.9Workingcapital-2,495Netinterest350OtherAssociates420Non-Op/Except/OtherAdj873Capex-1,851-2,144-3,324-3,651-4,010Pre-taxprofit5,0008,773Netacq/disposals-1,192000Tax-225-262-316-393-483Other-7,214Extraord./Min.Int./Pref.div.-34-61-76-95-116InvestingcashflowReportednetprofit8,175Dividendspaid-1,131-1,335-1,104-1,382-1,715NetMargin(%)12.6Financingcashfl-323-1,833-1,422-1,694CoreNPAT4,7424,2865,3626,6552,739-5,2683,3713,6704,817 5,202ReportedEPS(Rmb)2.4723.036CoreEPS(Rmb)2.4723.036DPS(Rmb)0.4500.4100.5130.6370.782CFPS(Rmb)2.6572.9793.2883.940FCFPS(Rmb)0.6252.451BVPS(Rmb)9.146Wtdavgordshares(m)2,6642,6782,6922,6922,692Wtdavgdilutedshares(m)2,6642,6782,6922,6922,692GrowthratesSalesrevenue(%)21.825.5EBIT(Adj)(%)-5.128.526.624.9CoreNPAT(%)-9.6CoreEPS(%)-10.124.524.122.8BalanceSheet(Rmbm)Cash&cashequiv.9,1595,3418,713Accountsreceivables20,36122,770Inventory6,2486,9568,3149,520Netfixed&othertangibles9,56220,73023,15825,628Goodwill&intangibles2,9592,9612,9722,9792,983Financial&otherassets6,3086,9887,2127,4387,672Accountspayable7,19123,406Short-termdebt7,0018,1397,9397,7397,539Long-termdebt2,3452,8742,8742,8742,874Provisions&otherliab7,4207,5967,8288,0558,283Shareholders'equity24,48227,99432,25237,52543,985Minorityinterests43525,00128,4295,6722,101-1,769-6,786Netdebttoequity(Adj)(%)20.0-4.6-15.2Fordefinitionsoftheitemsinthistable,pleaseclickhere.ShenzhenInovanceTechnology(300124.SZ)Grossprofit2,2492,8932,7362,7542,7823,383EPS0.3030.4880.4610.3460.4910.532GPM34.6%29.9%29.7%23.7%31.0%28.7%29.6%Generalautomation2,9603,9803,1604,0433,8404,378NEV2,3003,9294,1715,6823,8475,501Industrialrobots2403◎2025CitigroupInc.NoredistributionwithoutCitigroup'swrittenpermission.Source:CompanyReportsandCitiResearchEstimates,BloombergRevenueGrossProfitOperatingprofitNetProfitEPS(Rmb)GPMNPM47,843 6,601 6,177 30.1%7,9637,4532.80330.2%-13%-13%-13%-14%-1.6pp-1.4pp-1.4pp46,47764,9608,7916,6558,17528.4%28.8%29.3%-10%-11%-12%-1.4pp-0.9pp-0.9ppRevenueGrossProfitOperatingprofitNetProfitEPS(Rmb)MarginsGPMNPM46,0265,3745,2501.97427.9%6,5006,3332.38627.6%65,7937,6907,5692.84427.5%64,96064,96046,47755,6935,7727,1605,7727,1608,7915,3626,6558,17528.4%28.4%0.6pp0.7pp0.1pp0.6pp⑥2025CitigroupInc.NoredistributionwithoutCitigroup'swrittenpermission.8.0%6.0%4.0%2.0%0.0%2025E45%40%35%45%40%35%22,51530%25%20%25%20%25%4,939automationautomation40020002.8%26128520212022202320241H24◎2025CitigroupInc.NoredistributionwithoutCitigroup'swrittenpermission.Source:CitiResearch,CompanyReports◎2025CitigroupInc.NoredistributionwithoutCitigroup'swrittenpermission.Source:CompanyReportsandCitiResearchEstimates80.075.070.060.055.050.045.040.050%40%30%20%80.075.070.060.055.050.045.040.0&3888&&88&丈丈丈丈丈丈丈丈丈丈8Oct-11Oct-1176%60%40%54%20%21%10%——-1xSD70.060.050.040.030.020.00.019%21%15%14%Avg.80%◎2025CitigroupInc.NoredistributionwithoutCitigroup'swrittenpermission.Source:CitiResearch.CompanyReportsSource:CompanyReportsandCitiResearchEstimatesTechnology(300124.SZ)97643976430050development,manufactureanddistributionofindustrialautomaticcontrolproducts.Thecompanyalsoprovidesautomaticcontrolsystemsolutionstoequipmentmanufacturers.Majorbusinesssegmentsinclude:1)VFD(Variable-frequencyDrive);2)MotionControl(servodriveandmotor);3)AutomationControl(PLC);and4)NewEnergy(electricdrivecontroller,photovoltaicconverters),etc.Itsproductsarewidelyappliedinelevators,machinetools,aircompressors,metalproducts,wiresandcables,printingandpackaging,textiles,plastics,constructionmaterials,lifting,metallurgy,coal,municipal,chemical,electricpower,automobileindustriesintheequipmentmanufacturing,energysavingandnewenergyfields.double-digitYoYgrowthin2025E,primarilyduetoarecoveringgeneralautomationbusinessfromalowbase.Assuch,weexpectInovancetooutperformtheCSI300in2025afterunderperformingtheindexby>20%in2024TD.Rmb2.47,setat-0.5xSDtoreflectitsongoingGPMpressureduetoproductmixchange.Keyfundamentaldownsideriskstotheachievementofourtargetpriceare:1)slowerChinaautomationdemandrecovery;2)worse-than-expectedelevatordemandgrowth;3)weaker-than-expectedGPM.Theresearchanalystsprimarilyresponsibleforthepreparationandcontentofthisresearchreportareeither(i)designatedby“AC”intheauthorblockor(ii)listedinboldalongsidecontentwhichisattributabletothatanalyst.IfmultipleACanalystsaredesignatedintheauthorblock,eachanalystiscertifyingwithrespecttotheentireresearchreportotherthan(a)contentattributabletoanotherACcertifyinganalystlistedinboldalongsidethecontentand(b)viewsexpressedsolelywithrespecttoaspecificissuerwhichareattributabletoanotherACcertifyinganalystidentifiedinthepricechartsorratinghistorytablesforthatissuershownbelow.Eachoftheseanalystscertify,withrespecttothesectionsofthereportforwhichtheyareresponsible:(1)thattheviewsexpressedthereinaccuratelyreflecttheirpersonalviewsabouteachissuerandsecurityreferencedandwerepreparedinanindependentmanner,includingwithrespecttoCitigroupGlobalIMPORTANTDISCLOSURESCoveredNotcovered40202320242025Analyst:JamieWangDateRatingTargetPriceClosingPrice101-Mar-2302:01:17208-Jun-2308:07:50*3*46.0057.38322-Aug-2313:51:20*80.0068.01DateRatingTargetPriceClosingPrice719-Nov-2422:39:43*1*70.0058.88427-0ct-2311:36:37178.0069.0061.3859.9549.49(300124.SZ)Analyst:JamieWang40CW-CatalystWatch,STV-Short-TShort-TermView/CatalystWatch202320242025CitigroupGlobalMarketsInc.oritsaffiliatesreceivedcompensationforproductsandservicesotherthaninvestmentbankingCitigroupGlobalMarketsInc.oritsaffiliatescurrentlyhas,orhadwithinthepast12months,CitigroupGlobalMarketsInc.oritsaffiliatesreceivedcompensationforproductsandservicesotherthaninvestmentbankingCitigroupGlobalMarketsInc.oritsaffiliatescurrentlyhas,orhadwithinthepast12months,thefollowingasclients,andtheservicesprovidedwerenon-investment-banking,non-securities-related:ShenzhenInovanceTechnology.Analysts'compensationisdeterminedbyCitiResearchmanagementandCitigroup'sseniormanagementandisbaseduponactivitiesandservicesintendedtobenefittheinvestorclientsofCitigroupGlobalMarketsInc.anditsaffiliates(the“Firm”).Compensationisnotlinkedtospecifictransactionsorrecommendations.LikeallFirmemployees,analystsreceivecompensationthatisimpactedbyoverallFirmprofitabilitywhichincludesinvestmentbanking,salesandtrading,andprincipaltradingrevenues.Onefactorinequityresearchanalystcompensationisarrangingcorporateaccesseventsbetweeninstitutionalclientsandthemanagementteamsofcoveredcompanies.Typically,companymanagementismorelikelytoparticipatewhentheanalysthasapositiveviewofthecompany.ForfinancialinstrumentsrecommendedintheProductinwhichtheFirmisnotamarketmaker,theFirmisaliquiditinsuchfinancialinstruments(andanyunderlyinginstruments)andmayactasprincipalinconnectionwithtransactionsinsuchinstruments.TheFirmisaregularissueroftradedfinancialinstrumentslinkedtosecuritiesthatmayhavebeenrecommendedintheProduct.TheFirmregularlytradesinthesecuritiesoftheissuer(s)discussedintheProduct.TheFirmmayengageinsecuritiestransactionsinamannerinconsistentwiththeProductand,withrespecttosecuritiescoveredbytheProduct,willbuyorsellfromcustomersonaprincipalbasis.UnlessstatedotherwiseneithertheResearchAnalystnoranymemberoftheirteamhasviewedthematerialoperationsoftheCompaniesforwhichaninvestmentviewhasbeenprovidedwithinthepast12months.9Forimportantdisclosures(includingcopiesofhistoricaldisclosures)regardingthecompaniesthatarethesubjectofthisCitiResearchproduct("theProduct"),pleasecontactCitiResearch,388GreenwichStreet,6thFloor,NewYork,NY,10013,Attention:Legal/Compliance[E6WYB6412478].Inaddition,thesameimportantdisclosures,withtheexceptionoftheValuationandRiskassessmentsandhistoricaldisclosures,arecontainedontheFirm'sdisclosurewebsiteat/cvr/eppublic/citiresearchdisclosures.ValuationandRiskassessmentscanbefoundinthetextofthemostrecentresearchnote/reportregardingthesubjectcompany.PursuanttotheMarketAbuseRegulationahistoryofallCitiResearchrecommendationspublishedduringthepreceding12-monthperiodcanbeaccessedviaCitiVelocity(/cv2)oryourstandarddistributionportal.Historicaldisclosures(foruptothepastthreeyears)willbeprovideduponrequest.CitiResearchEquityRatingsDistributionCitiResearchGlobalFundamentalCoverage(Neutral=Hold)CitiResearchstockrecommendationsincludeaninvestmentratingandanoptionalriskratingtohighlighthighriskstocks.Riskratingtakesintoaccountbothpricevolatilityandfundamentalcriteria.StockswilleitherhavenoriskratingoraHighriskratingassigned.InvestmentRatings:CitiResearchinvestmentratingsareBuy,NeutralandSell.Ourratingsareafunctionofanalystexpectationsofexpectedtotalreturn("ETR")andrisk.ETRisthesumoftheforecastpriceappreciation(ordepreciation)plusthedividendyieldforastockwithinthenext12months.Thetargetpriceisbasedona12monthtimehorizon.TheInvestmentratingdefinitionsare:Buy(1)ETRof15%ormoreor25%ormoreforHighriskstocks;andSell(3)fornegativeETR.AnycoveredstocknotassignedaBuyoraSellisaNeutral(2).ForstocksratedNeutral(2),ifananalystbelievesthatthereareinsufficientvaluationdriversand/orinvestmentcatalyststoderiveapositiveornegativeinvestmentview,theymayelectwiththeapprovalofCitiResearchmanagementnottoassignatargetpriceand,thus,notderiveanETR.CitiResearchmaysuspenditsratingandtargetpriceandassign“RatingSuspended”statusforregulatoryand/orinternalpolicyreasons.CitiResearchmayalsosuspenditsratingandtargetpriceandassign"UnderReview"statusforotherexceptionalcircumstances(e.g.lackofinformationcriticaltotheanalyst'sthesis,tradingsuspension)affectingthecompanyand/ortradinginthecompany'ssecurities.Inbothsuchsituations,theratingandtargetpricewillshowas“—“and“-“respectivelyintheratinghistorypricechart.Priorto11April2022CitiResearchassigned“UnderReview”statustobothsituationsandprioexceptionalcircumstances.Assoonaspracticaallypossible,theanalystwillpublishanotere-establishingaratingandinvestmentthesis.Investmentratingsaredeterminedbytherangesdescribedaboveatthetimeofinitiationofcoverage,achangeininvestmentand/orriskrating,orachangeintargetprice(subjecttolimitedmanagementdiscretion).Attimes,theexpectedtotalreturnsmayfalloutsideoftheserangesbecauseofmarketpricemovementsand/orothershort-termvolatilityortradingpatterns.SuchinterimdeviationswillbepermittedbutwillbecomesubjecttoreviewbyResearchManagementafterevaluatingthestock'sexpectedperformanceandrisk.calltoindicatetheanalystexpectsthesharepricetorise(fall)inabsolutetermsoveraspecifiedperiodof30or90daysinreactiontooneormorespecificnear-termcatalystsoreventsimpactingthecompanyorthemarket.ACatalystWatchwillbepublishedwhenAnalystconfidenceishighthatanimpacttosharepricewilloccur;itwillbeaSTVwhenconfidencelevelismoderate.ACatalystWatchorSTVUpside/Downsidecallwillautomaticallyexpireattheendofthespecified30/90dayperiod.TheCatalystWatchwillalsobeautomaticallyremovedifsharepriceperformance(calculatedatmarketclose)exceeds15%againstthedirectionofthecall(unlessover-riddenbytheanalyst).TheanalystmayalsoremoveaCatalystdifferentfromanddoesnotaffectastock'sfundamentalequityrating,whichreflectsalonger-termtotalabsolutereturnexpectation.ForpurposesofFINRAratings-distrribution-disclosurerules,aCatalystWatch/STVUpsidecallcorrespondstoabuyrecommendationandaCatalystWatch/STVDownsidecallcorrespondstoasellrecommendation.AnystocknotassignedtoaCatalystWatchUpside,CatalystWatchDownside,STVUpside,orSTVDownsidecallisconsideredCatalystWatch/STVNoView.ForpurposesofFINRAratingsdistribution-disclosurerules,wecorrespondCatalystWatch/STVNoViewtoHoldinourratingsdistributiontableforourCatalystWatch/STVUpside/Downsideratingsystem.However,wereiteratethatwedonotconsiderNoViewtobearecommendation.ForallCatalystWatch/STVUpside/Downsidecalls,riskexiststhatthecatalyst(s)andassociatedshare-pricemovementwillnotmaterializeasexpected.Thelegalentitiesemployingtheauthorsofthisreportarelistedbelow(andtheirregulatorsarelistedfurtherherein).Non-USresearchanalystswhohavepreparedthisreport(i.e.,allresearchanalystslistedbelowotherthanthoseidentifiedasemployedbyCitigroupGlobalMarketsInc.)arenotregistered/qualifiedasresearchanalystswithFINRA.Suchresearchanalystsmaynotbeassociatedpersonsofthememberorganization(butareemployedbyanaffiliateofthememberorganization)andthereforeinstrument,unlessotherwisestated.timedisplayedatthetopoftheProduct.IftheProductreferencesviewsofotheranalyststhenpleaserefertothepricechartorratinghistorytableforthedate/timeofcompletionandfirstdisseminationwithrespecttothatview./cvr/eppublic/citiresearchdisclosures.at/cvr/eppublic/citiresearchdisclosures.showninbrackets)isasfollows:Q22025Buy33%(63%),Hold44%(51%),Sell23%(49%),RV0.4%(86%);Q12025Buy33%(63%),Hold44%(51%),Sell23%(49%),RV0.5%(87%);Q42024Buy32%(64%),Hold44%(52%),Sell23%(44%),RV0.4%(92%);Q32024Buy33%(61%),Hold44%(52%),Sell23%(49%),RVO.4%(80%).Forthepurposesofdisclosingrecommendationsotherthanforequity(whosedefinitionscanbeideawhichdoesnothaveacleardirectiontotheinvestmentsTool(/cv2/#go/CHARTING_3_Equities)providesthefacilitytocreatecustomisablepricechartsCitiVelocity(/).ForfurtherinformationcontactCitiVelocitysupport(/cv2/go/CLIENT_SUPPORT).Thesourceforallreferencedprices,unlessotherwisestated,isoffutureresults.ForecastsarenotaguaranteeorreliableindicatoroffutureperforCitigroupGlobalMarketsIndiaPof1%ormoreinthedebtsecuritiesofthesubjectprogramsadministeredandenforcedbytheOfficeofForeignAssetsControloftheU.S.TreasuryInvestmentAdvice,InvestmentMarketingandInvestmentPortfolioManagementlaw,1995(the"AdvisoryLaw").SecuritiesAuthority("ISA")andthiscommunicationdoesnotconstituteinvestmentormarketingadvice.TheinformationFirm'sproprietaryelectronicdistributionplatforms(e.g.,CitiVelocityandvariousGlobalWealthplatforms).Asaconvenience,certain,butnotall,researchcontentmaybedistributedthroughthirdpartyaggregators.ClientsmayreceiveFirm'sproprietaryelectronicdistributionplatforms(e.g.,CitiVelocityandvariousGlobalWealthplatforms).Asaconvenience,certain,butnotall,researchcontentmaybedistributedthroughthirdpartyaggregators.Clientsmayreceivepublishresearchreportsbyemail,onadiscretionarybasis,andonlyaftersuchresearchcontenthasbeenbroadlydisseminated.Certainresearchismadeavailableonlytoinstitutionalinvestorstosatisfyregulatoryrequirements.ThelevelandtypesofservicesprovidedbyCitiResearchanalyststoclientsmayvarydependingonvarioupreferencesastothefrequencyandmannerofreceivingcommunicationsfromanalysts,theclient'sriskprofileandinvestmentfocusandperspective(e.g.market-wide,sectorspecific,longterm,short-termetc.),thesizeandscopeoftheoverallclientrelationshipwiththeFirmandlegalandregulatoryconstraints.PursuanttoComissaodeValoresMobiliáriosResoluc?o20andASICRegulatoryGuide264,CitiisrequiredtodisclosewhetheraCitirelatedcompanyorbusinesshasacommercialrelationshipwiththesubjectcompany.ConsideringthatCitioperatesmultiplebusinessesinmorethan100countriesaroundtheworld,itislikelythatCitihasacommercialrelationshipwiththesubjectcompany.information,commentsandrecommendationsstatedhere,arenotwithinthescopeofinvestmentadvisoryactivity.Investmentadvisoryserviceisprovidedinaccordancewithacontractofengagementoninvestmentadvisoryconcludedbetweenbrokeragehouses,portfoliomanagementcompanies,non-depositbanksandclients.Commentsandrecommendationsstatedhererelyontheindividualopinionsoftheonesprovidingthesecommentsandrecommendations.Theseopinionsmaynotfittoyourfinancialstatus,riskandreturnpreferences.Forthisreason,tomakeaninvestmentdecisionbyrelyingsolelytothisinformationstatedheremaynotbringaboutoutcomesthatfityourexpectations.Furthermore,CitiResearchisadivisionofCitigroupGlobalMarketsInc.(the“Firm”),whichdoesandseekstodobusinesswithcompaniesand/ortradesonsecuritiescoveredinthisresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport,howeverinvestorsshouldalsonotethattheFirmhasinplaceorganisationalandadministrativearrangementstomanagepotentialconflictsofinterestofthisnatureSecuritiesrecommended,offered,orsoldbytheFirm:(i)arenotinsuredbytheFederalDepositInsuranceCorporation;(i)arenotdepositsorotherobligationsofanyinsureddepositoryinstitution(includingCitibank);and(iii)aresubjecttoinvestmentrisks,includingthepossiblelossoftheprincipalamountinvested.TheProductisforinformationalpurposesonlyandisnotintendedasanofferorsolicitationforthepurchaseorsaleofasecurity.AnydecisiontopurchasesecuritiesmentionedintheProductmusttakeintoaccountexistingpublicinformationonsuchsecurityoranyregisteredprospectus.AlthoughinformationhasbeenobtainedfromandisbaseduponsourcesthattheFirmbelievestobereliable,wedonotguaranteeitsaccuracyanditmaybeincompleteandcondensed.Note,however,thattheFirmhastakenallreasonablestepstodeterminetheaccuracyandcompletenessofthedisclosuresmadeinthelmportantDisclosuressectionoftheProduct.TheFirm'sresearchdepartmenthasreceivedassistancefromthesubjectcompany(ies)referredtointhisProductincluding,butnotlimitedto,discussionswithmanagementofthesubjectcompany(ies).Firmpolicyprohibitsresearchanalystsfromsendingdraftresearchtosubjectcompanies.However,itshouldbepresumedthattheauthoroftheProducthashaddiscussionswiththesubjectcompanytoensurefactualaccuracypriortopublication.StatementsandviewsconcerningESG(environmental,social,governance)factorsaretypicallybaseduponpublicstatementsmadebytheaffectedcompanyorotherpublicnews,whichtheauthormaynothaveindependentlyverified.ESGfactorsareoneconsiderationthatinvestorsmaychoosetoexaminewhenmakinginvestmentdecisions.Allopinions,projectionsandestimatesconstitutethejudgmentoftheauthorasofthedateoftheProductandthese,plusanyotherinformationcontainedintheProduct,aresubjecttochangewithoutnotice.Pricesandavailabilityoffinancialinstrumentsalsoaresubjecttochangewithoutnotice.NotwithstandingotherdepartmentswithintheFirmadvisingthecompaniesdiscussedinthisProduct,informationobtainedinsuchroleisnotusedinthepreparationoftheProduct.AlthoughCitiResearchdoesnotsetapredeterminedfrequencyforpublication,iftheProductisafundamentalequityorcreditresearchreport,itistheintentionofCitiResearchtoprovideresearchcoverageofthecoveredissuers,includinginresponsetonewsaffectingtheissuer.Fornon-fundamentalresearchreports,CitiResearchmaynotprovideregularupdatestotheviews,recommendationsandfactsincludedinthereports.NotwithstandingthatCitiResearchmaintainscoverageon,makesrecommendationsconcerningordiscussesissuers,CitiResearchmaybeperiodicallyrestrictedfromreferencingcertainissuersduetolegalorpolicyrestriction,thetradeideawillberemovedfromanylistofopentradeideasincludedintheProduct.Upontheliftingoftherestriction,thetradeideawilleitherbere-instatedintheopentradeideaslistiftheanalystcontinuestosupportitoritwillbeofficiallyclosed.CitiResearchmayprovidedifferentresearchproductsandservicestodifferentclassesofcustomers(forexample,baseduponlong-termorshort-terminvestmenthorizons)thatmayleadtodifferingconclusionsorrecommendationsthatcouldimpactthepriceofasecuritycontrarytotherecommendationsinthealternativeresearchproduct,providedthateachisconsistentwiththeratingsystemforeachrespectivepr