Shenzhen Inovance's Preliminary Numbers Offer Few Surprises; FVE Retained

We retain our fair value estimate for Shenzhen Inovance at CNY 64 per share after the company announced preliminary 2022 figures. The numbers largely meet our expectations except for some noncore items. We intend to update our forecasts once Inovance announces full-year 2022 and first-quarter 2023 results at the end of April. The investment thesis for Inovance to achieve above-industry average growth in the industrial automation and electric vehicle segments is unchanged. We are confident that Inovance can deliver about 25% top-line growth in 2023 due to expansion of its elevator business in Europe, recognition of electric-vehicle-related revenue from more models (and brands), and possible price hikes following competitors’ adjustments after the lunar new year.