According to the company's semi-annual report for 2023, 23H1 achieved 714 million yuan in revenue, + 96.6% year-on-year, 45 million yuan in net profit,-9.4% in year-on-year, 30 million yuan in non-return net profit, + 172.3% in revenue in a single quarter, + 101.5% in year-on-year, and 88 million yuan in net profit in 88 million yuan, + 82.2% in the same period last year. The company's performance recovered as scheduled, with orders-on-hand reaching 2.88 billion yuan (as of 2023.7.31), with the development of the three major business sectors improving. Give the target price 36 yuan and maintain the "buy" rating.

Focus on the new energy main track, on-hand orders to ensure performance growth. From a business point of view, 23H1 achieved revenue of 463 million yuan for automotive intelligent equipment, + 174.3% year-on-year, short-term pressure for recharging business, revenue of 122 million yuan,-8.2% year-on-year, and revenue of 97 million yuan for battery intelligent manufacturing, + 126.9% year-on-year. The company firmly focuses on the main business of new energy electrification and intelligence, selling a 45% stake in Suzhou Hanma Intelligent Technology Co., Ltd., and divesting the industrial interconnection business. As of 2023.7.31, the company's on-hand order is 2.88 billion yuan, of which the battery / rechargeable / automotive intelligent equipment order is 1.05 billion yuan respectively. Sufficient orders lay the foundation for subsequent performance growth.

Profitability has been significantly repaired and economies of scale have emerged. 23H1 achieved a gross profit margin of 28.8%, year-on-year-2.9pcts, in which the gross profit margin of automobile equipment / power exchange equipment / lithium-ion equipment was 32.9%, 21.5%, 19.5%, respectively, year-on-year-4.7/-2.9/-7.2pcts. 23H1 sales / management / R & D expense rates are respectively year-on-year + 1.3pcts/-2.7pcts/+0.2pct, and finally achieve a net interest rate of 6.1%, year-on-year-7.1pcts. Q2 single-quarter gross profit margin 29.4%, year-on-year-3.9pcts; net profit rate 16.9%, year-on-year-0.95pct, month-on-month turnaround. With the optimization of the company's product structure, the follow-up profitability improvement is expected.

New product research and development and customer development continue, overseas market performance is expected. During the reporting period, the company's new energy vehicle flat line motor stator standard production line equipment development and release of the first stage equipment has been completed and has proofing capacity; completion and release of all-polar ear large cylindrical assembly line products; high-speed transmission wire harness and other standard products have reached cooperation with BYD and other first-line manufacturers, customer development is progressing smoothly. In terms of overseas markets, the company has a deep presence in the North American market and began to expand its automobile manufacturing equipment business in North America in 2019. 23H1 achieved overseas revenue of 104 million yuan, + 44% year-on-year, and overseas gross profit margin of 46.7%, significantly higher than the domestic gross profit margin of 25.8%. With the deepening of the company's business layout in Southeast Asia and Europe, revenue-performance is expected to continue to increase.

The layout of power exchange products is perfect, giving priority to the improvement of the prosperity of the industry. According to the company announcement, the company has completed the development and product construction of passenger / commercial vehicle exchange power station, station control cloud platform, operation and maintenance terminal and battery package, and received customer orders at the end of the first half of the year. Under the recent policy stimulus, the new power exchange operators are expected to continue to enter the market, and the company, as a leading equipment supplier, is expected to receive priority orders, and the power exchange business is expected to usher in marginal improvement in 23H2.

Anchor the Southeast Asian market that embraces new energy and open up room for growth. 1) the automobile market in Southeast Asia has great potential. According to OICA data, Thailand produced 1.8835 million vehicles in 2022, up 12% from the same period last year, ranking 10th in the world. Indonesia produced 1.4701 million vehicles in 2022, up 31% from the same period last year, ranking 11th, with a high auto market in Southeast Asia. 2) Southeast Asian countries / regions have strong policy promotion efforts, and automobile companies have invested in setting up factories. In order to promote the development of domestic new energy vehicles, Southeast Asian governments have issued policies "big gift packages" to attract front-line car companies such as GAC Ean and BYD to invest in building factories. As a supplier of automatic production equipment for new energy vehicles, Hanchuan Intelligence has made corresponding strategic planning and is expected to open up new incremental space.

Risk factors: the risk of new business market development; the increasing competition in the power exchange industry; the construction progress of the power station is not as expected; the risk of macroeconomic cyclical fluctuations; the policies of the relevant countries are not as expected; the implementation of the company's fund-raising projects is not as expected.

Profit forecast, valuation and rating: the company arranges the power exchange business and binds the downstream core customers, which is expected to benefit from the penetration of the power exchange mode; abundant business orders for battery equipment are expected to benefit from the energy storage market to achieve corner overtaking. The company's performance recovered as scheduled, and the battery and intelligent business grew rapidly. We maintain the forecast of the company's homing net profit of 212 million / 297 million / 387 million yuan in 2023-24-25, and the current price corresponding to 2023-24-25 PE is respectively times that of 26-19-15. With reference to comparable company Bo Zhong Seiko and Kelai Wind, it is expected that the average PE in 2023 will be 30x, and the company will be given 30xPE in 2023, corresponding to the target price of 36 yuan, maintaining a "buy" rating.