Affected by the relative downturn of the new energy vehicle industry in the first half of the year, the company's performance in the first half of this year was insipid. In the first half of this year, the new energy vehicle industry was affected by the state subsidy slope, and its short-term development was depressed. In particular, the new energy commercial vehicle industry, which is mainly downstream of the company, produced a total of 31000 vehicles in the first half of the year, down 37.6% from the same period last year, while the decline in state subsidy and industry sales also put pressure on the price of the company's electronic control products. As a result, the gross profit margin of the company's electronically controlled products fell to 39.89% in the first half of the year, down 7.23 percentage points from the same period last year. However, by deepening existing customers and actively opening up new customers, the company still implemented a 16.41% increase in electronic control revenue to 233 million yuan in the first half of the year, and the company's total operating income in the first half of the year was 294 million yuan, an increase of 14.39% over the same period last year. The net profit attributed to the shareholders of the parent company was 70.84 million yuan, an increase of 4.74% over the same period last year.

New energy commercial vehicles have improved in June and July, and the company is expected to benefit from the impact of the industry's recovery. The impact on the new energy commercial vehicle industry in the second quarter has been gradually digested. From January to May this year, the cumulative sales of new energy commercial vehicles reached 15000, compared with 16000 in June and 12000 in July. The commercial vehicle industry in June and July showed restorative growth compared with the previous May.

With the arrival of the traditional peak season of new energy commercial vehicles in the second half of the year, especially in the fourth quarter, we expect the production and sales performance of new energy commercial vehicles, especially new energy logistics vehicles, in the second half of the year will be better than the traditional off-season in the first half of the year. The company's operation is also expected to benefit from the recovery of the downstream industry.

The company is actively developing the electric control of pure electric passenger vehicles, which is also the key to the medium-and long-term development. In addition to the new energy commercial vehicle market, the new energy passenger vehicle market is another important downstream of electronic control. However, the quality requirements and certification cycle for electronic control of passenger vehicles are stricter than those of commercial vehicles. At present, the market share of domestic third-party electronic control of passenger vehicles is less than that of commercial vehicles. At present, the company is actively promoting the research and development of motor controllers for pure electric passenger cars and increasing investment in research and development. at present, it has contacted a number of domestic passenger car enterprises to carry out technical docking and prototype calculation. whether the company can break through the field of electric control of passenger vehicles in the future is also the key to whether the company can open the space for medium-and long-term development.

It is estimated that the company's EPS in 2017-2019 will be 0.95,1.26,1.54 yuan respectively. With the arrival of the traditional peak season of new energy commercial vehicles in the second half of the year, especially in the fourth quarter, the company is expected to improve in the second half of the year with the industry month-on-month. It is predicted that the company's EPS will be 0.95,1.26,1.54 yuan in 2017-2019, and the current stock price corresponds to 28 times, 21 times and 17 times PE. Maintain a "buy" rating.

Risk hint

The production and sales of new energy vehicles are lower than expected; the company's electronic control shipments are lower than expected; and the company's industrial control is lower than expected.