On August 18, 2023, Science and Technology New Source released the mid-year report of 2023. The company's 1H23 realized income of 240 million yuan, an increase of 1.42% over the same period last year; realized a net profit of 12 million yuan, turning losses into profits; and deducted 2.26 million yuan of non-return net profit, an increase of 111.5% over the same period last year. In a single quarter, 2Q23 achieved an operating income of 150 million yuan, an increase of 22.3% over the same period last year, and a net profit of 20 million yuan, compared with a loss of 10.03 million yuan in the same period last year.
From the point of view of business, the business of automotive seal products contributes to higher income growth. With the rapid development of the automotive industry, and the company continues to strengthen the development of the electricity market, 1H23 automotive seal product business revenue increased by 24.68 million yuan over the same period last year, an increase of 108.8%; power industry product revenue increased by 21.38 million yuan over the same period last year, an increase of 44.87%. In the field of automotive industry, the company mainly carries out automotive seal business through Wuhuxiang Road. We believe that with the rapid improvement of the prosperity of 1H23 automotive industry, Wuhu Xianglu has completed and realized the synchronous development and batch supply of new model seals for major customers, and expanded the supply share of existing models of major customers through quality and cost advantages, driving the rapid growth of the company's automotive seal business. We expect that the number of models used in the mass delivery of automotive seals on 2H23 Wuhu Xianglu will further increase.
The thermal management business is expected to be the company's next growth point. 1H23 invested 90.13 million yuan to increase the capital of Ruitaike. After the capital increase was completed, the registered capital of Ruitaike increased to 43.36 million yuan, and the company held a 73.83% stake in Ruitaike. Ruitaike products are mainly used in new energy vehicle power batteries and energy storage systems, household appliances, communications, data centers and other fields, and have maintained stable cooperation with Xinwanda, Honeycomb Energy, Kelu Electronics, Zhongtian Science and Technology, etc. and established business cooperation with Yiwei Lithium Energy, Shandong Electrical Engineering, Special Electric Engineering and so on.
The field of thermal management has a broad prospect and is optimistic about the new strategic anchor of the company. According to the guidance on accelerating the Development of New Energy Storage jointly issued by the National Development and Reform Commission and the National Energy Administration, the comprehensive market-oriented development of new energy storage will be realized in 2030. According to statistics from the China Association of Automobile Manufacturers, from January to June 2023, the production and sales of new energy vehicles completed 3.788 million and 3.747 million respectively, an increase of 42.4% and 44.1% respectively over the same period last year, with a market share of 27.7%. According to data from Beijing Hengzhou Bozhi International Information Consulting Co., Ltd., the global market scale of automotive battery thermal management system reached 4.1 billion yuan in 2020 and is expected to reach 19.7 billion yuan in 2026, with an annual compound growth rate of 25.2%. At present, the company's thermal management business products include new energy vehicles and liquid-cooled plates for energy storage systems, and we believe that the new energy vehicles and energy storage industry will usher in a broad space for development. the company's market share of power batteries for new energy vehicles and thermal management systems for energy storage systems is expected to increase rapidly.
Investment suggestion: the company's communications and power industry polymer materials business has a deep moat and is expected to maintain a high gross profit margin; the liquid-cooled plate business has passed the certification of core major customers, the capacity expansion is smooth, and the performance is expected to be fully released in 2023; the company's forward-looking layout of silicon carbide substrate is expected to benefit from the accelerated improvement of new energy vehicle permeability and the localization rate of semiconductor materials. We estimate that the company's operating income from 2023 to 2025 will be 675 pounds, 821 pounds, 929 million yuan, and the net profit from its parent will be 0.19 pounds, 0.22 million dollars, corresponding to Pamp E 117,102max 77x.
Risk hint: the purchase price of liquid-cooled plate is not as expected, the progress of customer certification of liquid-cooled plate is not as expected, and the competition in the industry is intensified.