Revenue hit a record high in the first half of the year: benefiting from the global economic recovery, the company's revenue in the first half was 8.23 billion yuan (the same below), an increase of 64% over the same period last year, a record high; comprehensive gross profit and net profit were 2.66 billion yuan and 1.58 billion yuan, up 57.7% and 54.1% respectively over the same period last year. The comprehensive gross profit margin fell 1.3ppts to 32.3% compared with the same period last year, and the net profit margin decreased by 1.2ppts to 19.3% year-on-year. The profit margin fell within expectations, mainly due to the rise in the price of raw materials.

The sales performance of high-end models is satisfactory: in the first half of the year, Mars series revenue increased by 58.3% to 5.78 billion yuan compared with the same period last year; large and medium-sized tonnage models grew significantly due to the recovery of demand in high-end manufacturing and automobile industry. Changfei sub-electric series revenue increased by 86.1% year-on-year to 1.05 billion yuan, and Jupiter series revenue increased by 91.5% to 890 million yuan. The promotion of the company's third-generation phones has been fruitful, accounting for more than 60% of the sales of the third-generation phones in the first half of the year. The sales volume of the whole model in the first half of the year increased by 59.2% to 30182 units, and the average selling price increased by 3.1% to 265000 yuan

The high growth in overseas markets is expected to continue: thanks to the company's overseas market expansion, overseas market sales in the first half of the year rose sharply by 56.1% to 2.51 billion yuan compared with the same period last year, the highest in nearly five years. The company has acted ahead of time to deal with the recovery of manufacturing in overseas regions, including the continued promotion of overseas production capacity, as well as the advance deployment of personnel and the implementation of local customized special planes in areas where the epidemic has recovered rapidly. We expect the company's overseas business to continue to grow at a high rate in the second half of the year. Sales in the domestic market rose 67.7% to 5.72 billion yuan in the first half of the year compared with the same period last year, but in view of the weakening dividends previously benefiting from the return of overseas epidemic orders, the growth rate of domestic consumer goods exports is expected to slow, while domestic consumption is weak. small and medium-sized enterprises are squeezed by commodity inflation, and the willingness to invest in new machines may be restrained, so we expect the company's domestic market sales growth in the second half of the year to be conservative.

Maintain the target price of HK $39.00, buy rating: the company's on-hand orders are still full, revenue growth in the second half of the year is relatively certain, in the medium to long term, the core deficiency in the automobile, home appliances and 3C industries will eventually be alleviated, and the demand growth forecast remains optimistic. On the profit side, the company's recent price increases are expected to be reflected in the second half of the year, as well as to withstand the negative impact of rising prices of bulk raw materials through operational efficiency improvement and supply chain integration. Taken together, we maintain the company's revenue and profit forecasts for 2021-2023, with net profit forecasts of HK $27.1,31.5 and 3.42 billion for the period, giving a target price of HK $39.00 for the next 12 months, corresponding to the multiple of forecast earnings for 20-17-16, 2021-2023, and maintaining the buy rating.