Shenzhen Inovance Earnings: Automation, EV Outlook, and Execution Shine in China Slowdown

We retain our fair value estimate of CNY 64 per share for narrow-moat-rated Shenzhen Inovance in the absence of both material model and company target changes. Our base case on long-term electric vehicle sales growth near 30% CAGR fueled by both content growth and EV shipments is unchanged. The stock is trading at 30 times 2024 P/E. Inovance is fairly valued in our view, but there are chances of overshoot if government stimulus restores confidence in corporate investments, lifting the outlook for general automation.