The company realized revenue of 2.011 billion yuan in the first half of 2021, + 36.8% of the same period last year, and net profit of 95 million yuan, + 28.6% of the same period last year. Among them, 2021Q2 achieved revenue of 1.07 billion yuan in a single quarter, + 13.2% year-on-year, and net profit of 65 million yuan,-7.8% compared with the same period last year, which is lower than we expected. The company's performance in the first half of the year was under pressure, mainly because the large and medium-sized passenger business was affected by the lower-than-expected government bus procurement; however, the car division's customer quality and product profitability improved significantly, with abundant orders on hand, and energy storage thermal management products have also been designated by customers such as Ningde era and Vision Energy, and we expect the business Q4 to start to contribute revenue this year. Considering that the company's large and medium-sized customers' business will be affected by government procurement in the future, the 2021/22/23EPS forecast will be reduced to 0.33Unix 0.42, 0.53 (the original forecast is 0.40, 0.48, 0.58). According to the forecast of the average annual compound growth rate in the next three years and the development potential of the energy storage business, it will be given 30 times PE in 2021, with a target price of 9.9 yuan, maintaining the "buy" rating.

The company's performance in the first half of 2021 was lower than expected. On August 28, the company released its semi-annual report 2021. In the first half of 2021, the company realized revenue of 2.011 billion yuan, + 36.8% of the same period last year, and net profit of 95 million yuan, + 28.6% of the same period last year. Of this total, Q2 achieved revenue of 1.07 billion yuan in a single quarter in 2021, + 13.2% year-on-year, and net profit of 65 million yuan,-7.8% compared with the same period last year. Mainly under the influence of the epidemic this year, the decline in government public transport procurement expenditure has led to pressure on the company's large and medium-sized passenger thermal management business, superimposed the impact of rising raw materials and lack of core, and the performance is lower than expected.

The company's gross profit margin was under pressure in the first half of 2021, and the expense rate also decreased. In the first half of 2021, the company's gross profit margin was 20.94%, year-on-year-4.61pcts, month-on-month + 1.43pcts; the sharp decline was mainly due to the adjustment of accounting standards at the end of last year, warehousing and logistics fees were included in operating costs, while the impact of lack of core and rising raw materials in the first half of the year were superimposed. From a business point of view, the gross profit margin of large and medium-sized passenger hot management business is 28.00%, year-on-year-10.66pcts; month-on-month ratio + 2.10pcts; car thermal management business gross profit margin is 15.72%, year-on-year + 0.64pct; month-on-month + 4.51pcts, profitability is significantly improved. The 2021H1 expense rate of the fee-end company is 14.82%, year-on-year-4.30pcts, month-on-month + 1.80pcts. Among them, the sales expense rate is 5.55%, year-on-year-3.43pcts; management expense rate is 4.51%, year-on-year-0.30pct; R & D expense rate is 4.75%, year-on-year-0.71pct; financial expense rate is 0.01%, year-on-year + 0.14pct.

The heat management business of large and medium-sized customers is under pressure, and the energy storage business has made a major breakthrough. In the first half of the year, due to the influence of the epidemic, government-side public transport procurement decreased, and the company's large and medium-sized passenger business declined significantly. The company's revenue from large and medium-sized passenger heat management business in the first half of 2021 was 397 million yuan,-23.7% compared with the same period last year. It is expected that in the future, with the epidemic control superimposed on the Winter Olympic Games and other events, the company's large and medium-sized customer business is expected to gradually improve. In addition, the business of the company's liquid cooling management system for energy storage power stations is growing rapidly. In the first half of 2021, the company won orders for thermal management products of various types of energy storage batteries from customers such as Ningde Times and Vision Energy, and will begin to supply and contribute revenue in the second half of this year. We expect revenue contribution to reach more than 30 million. With the rapid growth of energy storage power stations, as the company's liquid cooling and thermal management technology in large and medium-sized customers can be applied to energy storage power stations, we are optimistic about the development of the company in the field of thermal management of energy storage power plants.

The profit of car thermal management business continues to improve, and there are plenty of orders on hand. Since 2019, the company has adhered to the business strategy of "taking advantage of business at the same time". Since then, the car hot management business has been continuously developed, from loss to profit and profitability continues to improve. The company's commercial vehicle business, especially construction machinery air-conditioning products, accounts for an increasing proportion of sales. at present, the main customers are advanced construction machinery manufacturers such as Sany, Xugong, Futian and Shaanxi Automobile. In terms of passenger cars, the company continues to obtain high-quality independent and joint venture brand customers, and has obtained air-conditioning box projects for many models, such as NIO Inc. Automobile, Ford, SAIC GM, BYD, Changan Automobile, Jianghuai Automobile, SAIC GM Wuling, and so on. And through the acquisition of Jingbin Ocean into the Volkswagen and Honda supply chain system. The company's new orders in the first half of the year exceeded 2.5 billion yuan, close to the level of 3 billion yuan in the whole of last year.

Risk factors: the prosperity of the automotive industry is declining; the progress of product research and development is not as expected; the expansion of new products and new customers is not as expected.