Event: the company released its interim report for 2021 on August 21, 2021, achieving a total operating income of 251 million yuan and a gross profit of 43.57% for YoY+26.54%;, a decrease of 2.73 pct over the same period last year; a net profit of 41 million yuan for YoY+12.15%;, and a non-net profit of 36 million yuan for YoY+12.15%;, YoY+4.67%.
Comments: business income is growing steadily, and R & D investment continues to increase. Q2 achieved revenue of 116 million yuan in a single quarter in 2021. YoY-12.14%, was caused by the cooling of the heavy truck market at the purchasing end in the second quarter and the lack of core at the sales end affecting supply; the gross profit margin decreased by 2.73pct to 43.57% in the first half of the year, which was caused by the increase in the price of chips, electronic materials and other raw materials. The revenue of the company's intelligent enhanced driving system was 157 million yuan, an increase of 17.95% over the same period last year, while that of the advanced auxiliary driving system was 51 million yuan, an increase of 103.54% over the same period last year. On the expense side, the company spent 48 million yuan on R & D in the first half of 2021, with YoY+32.46%, R & D revenue accounting for 19.14%, and the investment continued to increase.
The market is expanding steadily and the product layout is accelerating. The company has applied the intelligent enhanced driving system to the bus field as early as 2010, and has since expanded to various types of vehicles, such as trucks, new energy buses, construction machinery vehicles, etc., and has continuously improved its permeability. it has become the fourth supplier of intelligent driving recorder in the top five heavy truck factories with obvious leading position in the industry. The business of Advanced Auxiliary driving system has achieved great growth in the first half of 2021, with new customers such as Jinlong, BeiBen and Geely commercial vehicles. In terms of new products, the company established Beijing Weibo in February 2021, engaged in automobile controller business, has supplied Sinotruk, and has layout in 5G-V2X, high precision positioning, AEB and other new technology fields.
The policy helps the market of intelligent network connection system for commercial vehicles. A series of policies such as "New Energy vehicle Industry Development Plan (2021-2035)" have effectively promoted the process of intelligence and networking of commercial vehicles. This year, various provinces have launched "active safety business" one after another, and the company has won the bid in many provinces and cities. obtain the product supply qualification, is expected to start bulk supply in the second half of the year. The new national standard for intelligent driving recorder is expected to be officially released in the second half of 2021, and the new functional requirements will significantly increase the value of the product.
Profit forecast: Hongquan Union of things is a leader in the field of domestic commercial vehicle networking. We are optimistic that the company will benefit from the promotion of national policies and the rapid development of the intelligent Internet-connected automobile industry in the future. From 2021 to 2023, we expect the company to achieve operating income of 658 million yuan and net profit of 1.86 million yuan and 253 million yuan respectively. Corresponding to EPS1.29/1.86/2.53 yuan, the company will be given an "overweight" rating for the first time.
Risk hints: policy below-expected risk, upstream raw material shortage and price fluctuation risk