Market Insight | Chervon Holdings Soars Nearly 6%, First-Half Net Profit Expected to Increase by Over 20%, Channel Inventory at Relatively Low Levels

CHERVON Holdings rose nearly 6%, as of the time of publication, it rose by 5.9% to HKD 19.4, with a turnover of HKD 1000.85 million. On the news front, CHERVON Holdings is expected to have a net profit of USD 60-65 million in the first half of 2024, a year-on-year increase of 22-33%. Guosen Securities pointed out that since the beginning of this year, with favorable weather conditions and the company's promotional activities, the sales performance of the company's flagship brand EGO and others has been strong, accelerating the destocking of downstream customers, and the company's shipments and orders are gradually recovering. Looking ahead to the second half of the year, with the bottoming out of channel inventory and the approaching interest rate cuts, it is expected that the company's revenue in the second half of the year will continue to accelerate, achieving the goal of a 15%-20% annual revenue growth. Zhongjin Research Report pointed out that according to the company's communication, the company's products in channel inventory have reached a relatively low level, and the rapid growth in downstream demand has led to strong replenishment demand in some months. The company believes that the replenishment cycle in the OPE industry is basically confirmed to be approaching. Looking ahead, the bank believes that the sustainability of industry replenishment demand needs to match the growth rate of end demand. In the medium to long term, it is expected that the repair of the real estate sector after the interest rate cuts in the United States will drive the recovery of durable consumer goods demand, and the bank is optimistic about CHERVON's performance after the industry demand recovers, leveraging its advantages in lithium-ion products