Event: according to the company's semi-annual report on 2022, 2022H1 achieved operating income of 1.54 billion yuan, + 25.19% year-on-year; net profit of 350 million yuan, + 13.22%; of which 2022Q2 achieved operating income of 780 million yuan, + 10.72%; net profit of 170 million yuan, + 7.3%.
Under the influence of the epidemic, 2022Q2 still achieved revenue and profit growth compared with the same period last year: in the second quarter of 2022, Suzhou and its surrounding areas were negatively affected by the COVID-19 epidemic, and production and logistics were faced with challenges. In this context, the company still achieved positive revenue and profit growth. In terms of profitability, 2022H1's gross profit margin is 33.56%, year-on-year-2.73pct, mainly due to the increase in the proportion of traditional electric vehicle motor revenue, pulling down the overall gross profit margin level. In the context of the continuous expansion of electric bikes around the world, the company is expected to continue to grow rapidly with the help of capacity expansion, relying on the advantages of product research and development and brand building.
Globally, the electric bicycle market continues to expand, and the long-term demand in Europe remains strong. Since 2020, the epidemic has spawned consumer demand for personal portable travel products, and the popularity and promotion of electric bikes have been further accelerated. In the first half of 2022, the European market is basically stable, inflation and Russian-Ukrainian conflict factors have a certain negative effect on short-term consumption, but long-term demand is still strong, with the aggravation of the energy crisis, more countries and consumers realize that bicycles and electric bicycles are important development directions of future means of transportation, and the electric bicycle market is still in the stage of vigorous development.
Product R & D + brand building, the company's competitiveness continues to improve. 2022H1, the company has launched new mid-set motor products such as M510 and M820 to further improve product performance; organize employees at home and abroad to attend various exhibitions in Poland, the United States, Japan, France and Germany, and carry out marketing activities by sponsoring bicycle teams to participate in sports events.
Production expansion projects have been started one after another to help seize the opportunity. 2022H1, the company's subsidiary infrastructure projects have started: among them, the Bafang Tianjin electric vehicle drive system manufacturing project will become the main manufacturing base of the company's domestic business in the future; Bafang new energy lithium battery pack and high-end drive system manufacturing project is a solid step for the company to continuously improve the product matching rate and provide customers with system optimization solutions. At present, the penetration level of electric bicycles is low around the world, and the market still maintains the trend of rapid development; with the introduction of new national standards and the development of shared electric bicycles, traditional electric two-wheelers have also ushered in changes. In this context, the company's accelerated production expansion will help to fully grasp the market opportunities.
Earnings forecast, valuation and rating: maintain the company's 22-24 net profit forecast, the company's 2022E-2024E net profit is expected to be 8.4 PE 11.1 billion yuan 1.37 billion, the current share price corresponding to 22-24 PE is 23-18-14 times, maintaining the "overweight" rating.
Risk tips: changes in the international trade environment; increased market competition; technology and product iterations reduce the company's competitiveness.
