The company announced that revenue in the first half of 2022 was 1.748 billion yuan,-13.1% compared with the same period last year, and net profit was 33 million yuan,-65.1%, compared with the same period last year. Of this total, the revenue in the second quarter of 2022 was 866 million yuan,-19.1% compared with the same period last year, and the net profit was 13 million yuan,-80.1% compared with the same period last year. The company's performance in the first half of the year is under pressure, mainly due to the continuous downturn in the downstream demand of the business department, superimposed by the rising prices of raw materials and other adverse factors. In recent years, the company has actively developed new business areas such as electric heavy truck battery thermal management system and energy storage power station battery thermal management system, and the latter has been designated by customers such as Ningde era and Vision Energy. It is expected to significantly improve the company's performance; the car business air-conditioning box project is also progressing smoothly. Considering the unfavorable factors such as the prosperity of the large and medium-sized customers industry and the high price of raw materials, we downgrade the company's 2022 EPS forecast to 0.21pm 0.33 yuan (the original forecast is 0.42 pound 0.53 yuan), add 0.48 yuan to the 2024 EPS forecast, and give it 30 times PE in 2023, corresponding to the target price of 9.9 yuan, maintaining the "buy" rating.

The company's performance is under pressure due to the epidemic and rising prices of bulk raw materials and other negative factors. The company announced on August 29 that the revenue in the first half of 2022 was 1.748 billion yuan,-13.1% compared with the same period last year, and the net profit returned to the mother was 33 million yuan,-65.1% compared with the same period last year. Of this total, the revenue in the second quarter of 2022 was 866 million yuan,-19.1% compared with the same period last year, and the net profit was 13 million yuan,-80.1% compared with the same period last year. The company's performance in the first half of the year is under pressure, mainly due to the continuous downturn in the downstream demand of the large and medium-sized customer division, superimposed by the rising cost of raw materials and other unfavorable factors. In the first half of 2022, the company's car thermal management product revenue was 1.165 billion yuan,-16.4% compared with the same period last year. Negative factors such as rising prices of bulk raw materials have also had an impact on the company's profitability.

The fluctuation of Q2 gross profit margin is mainly due to the influence of insufficient capacity utilization and high raw materials during the epidemic.

2Q22's gross profit margin is 18.2%, year-on-year-5.1pcts, month-on-month-1.8pcts. From a business point of view, the gross profit margin of the company's large and medium-sized bus thermal management products 2022H1 is 23.4%, year-on-year-4.7pcts, mainly due to the continuous downturn in downstream government bus procurement, the company's insufficient capacity utilization; car thermal management products gross profit margin of 14.5%, year-on-year-1.2pcts, superimposed the impact of the epidemic. The expense rate of 2Q22 is 16.1%, year-on-year + 0.9pct, month-on-month-1.2pcts, in which the sales expense rate is 5.8%, which is basically the same as the same period last year; the management expense rate is 4.7%, which is + 0.3pct; the R & D expense rate is 5.7%, which is + 0.5pct; and the financial expense rate is 0.0%, which is basically the same as the same period last year.

Car thermal management business continues to obtain high-quality customers, abundant orders on hand. The company's car division adheres to the business strategy of "simultaneous development of passengers and businessmen". While ploughing existing commercial vehicle customers, it also makes great efforts to develop in the field of passenger vehicles to cope with the impact of the sharp decline in commercial vehicle production and sales. The company takes radiator, air conditioner box and battery thermal management as the core products of passenger car business, and customers include head engine factories such as Volkswagen, Honda, General Motors, Ford, SAIC and Guangzhou Automobile, as well as new energy vehicle companies such as BYD, NIO Inc., Chinese Express and Huawei. In addition, the company has become a potential supplier of a well-known international electric vehicle company. In the first half of 2022, the car thermal management business section received more than 2 billion yuan of new orders, compared with 3.5 billion yuan of new orders for the whole of last year.

Relying on the accumulation of battery thermal management technology of large and medium-sized customers, we will actively develop new business and new products. Affected by the epidemic and macroeconomic and other factors, government-side public transport procurement decreased. Under this background, the company deeply excavates the third-and fourth-tier urban market, and the sales of thermal management systems for large and medium-sized buses in the first half of 2022 are nearly 12000, which is basically the same as that in the same period last year. While strengthening the market development, relying on the accumulation of battery thermal management technology of large and medium-sized customers, the company actively develops new business areas such as electric heavy truck battery thermal management system and energy storage power station battery thermal management system. In the first half of 2022, the company shipped more than 7000 sets of battery thermal management business, + 76.8% compared with the same period last year. In terms of energy storage business, the company has two types of energy storage thermal management to achieve mass production, and has entered the Ningde era, Vision Energy and other customer supplier system, we are optimistic about the company's development in the field of thermal management of energy storage power stations.

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.

Investment suggestion: the company is the leader of domestic large and medium-sized bus thermal management, performance pressure is mainly due to large and medium-sized passenger business is in the off-season, car business is affected by the lack of core. The company actively develops new business areas such as electric heavy truck battery thermal management system and energy storage power station battery thermal management system, the latter has been designated by Ningde era, Vision Energy and other customers, which is expected to significantly improve the company's performance and valuation. Considering the adverse factors such as the prosperity of the large and medium-sized customers industry and the high price of raw materials, we downgrade the company's 2022 EPS forecast for 23 years to 0.21 pm 0.33 yuan (the original forecast is 0.42 pm 0.53 yuan), and add 0.48 yuan to the 2024 EPS forecast. According to Wind consensus expectations, comparable company Gaolan shares, Invik 2023 PE average of 30 times, we give the company 2023 30 times PE, the target price of 9.9 yuan, maintain the "buy" rating.