The company released its semi-annual report for 2021, with an income of 842 million yuan, an increase of 36.83% over the same period last year, a net profit of 53 million yuan, a decrease of 38.40% over the same period last year, and a net profit of 39 million yuan after deduction, a decrease of 40.22% over the same period last year.

Revenue began to improve in the second quarter. In the second quarter of 2021, the company's revenue was 582 million yuan, an increase of 51.56% over the same period last year, mainly due to the impact of relocation in the first quarter. The company's gross profit margin in the first half of 2021 was 37.62%, a decrease of 9.70 percentage points compared with the same period last year, mainly due to higher procurement costs of major raw materials.

Adhere to long-term doctrine and maintain high investment in research and development. Despite the adverse trend of the rise in raw materials, the company still maintains a high investment in R & D investment, with a R & D expenditure rate of 14.74% in the first half of 2021. 15.25% in the same period last year, the sales expense rate and management expense rate in the first half of 2021 were 11.55% and 7.67%, respectively, which decreased compared with the same period last year.

The heavy truck began to land. The promulgation of the regulations of the people's Republic of China on Road Transport in 2020 affected provinces to begin to install active safety systems for trucks with more than 12 tons. During the reporting period, trucks of more than 12 tons in Guangdong Province are required to install active safety systems, which are already under installation and implementation, and the company has also actively participated in the implementation of the project. Car category sales revenue: in the first half of the year, taxis, front equipment, two passengers and one dangerous, innovative business have achieved rapid growth. The growth rate of domestic sales revenue is higher than that of overseas sales revenue.

Investment suggestion: the company is one of the core targets of the car network track, and is optimistic about the company's leading position in the global commercial vehicle market and the room for improving market penetration in the future. The EPS for 21-23 is expected to be 1.36,2.14,2.73 yuan respectively, maintaining a "buy" rating.

Risk tips: industry expansion is not as expected; overseas market expansion is not as expected; industry competition is intensified.