Main points of investment

2023 semi-annual report: net profit increased by 13% compared with the same period last year, lithium electrification and internationalization provided growth momentum 1) in the first half of 2023: revenue was 3.35 billion yuan, up 7% over the same period last year; net profit from home was 220 million yuan, up 13% from the same period last year; excluding the impact of foreign exchange gains and losses, net profit increased by 54% over the same period last year. Q2 single quarter: realized revenue of 1.66 billion yuan, up 12% from the same period last year; realized net profit of 120 million yuan, down 6% from the same period last year. 2) the profitability has improved significantly: the company's gross profit margin in the first half of the year is 22%, year-on-year + 4pct; net profit rate is 7%, year-on-year + 0.5pct. In the first half of the year, the company's sales, management, R & D and financial expense rates reached 4.76%, 5.43%, 3.70% and 0.39% respectively, compared with + 0.8pct, + 1.1pct,-0.1pct and + 1.5pct, respectively. 3) the decrease in exchange earnings in the first half of the year affects the company's profits: the company's net exchange income in the first half of 2023 was 2.96 million yuan, down 95% from 54.97 million yuan in the same period last year. Excluding the impact of exchange gains and losses, the company's net profit in the first half of the year increased by 54% compared with the same period last year.

Forklift business: overseas channel layout is mature, electrified, large-scale provides opportunities 1) forklift plays an important role in the enterprise logistics system, widely used downstream. Global forklift sales CAGR about 8% in 2011-2021 sales of nearly 2 million forklifts in 2021; China forklift sales in 2011-2021 CAGR about 15% of forklift sales reached 1.255 million in 2021.

2) the domestic lithium industry chain is complete, with the help of the electric trend of forklift trucks, lithium forklift trucks go to sea to help domestic forklift manufacturers enhance their international influence. The company actively distributes overseas markets, with overseas revenue CAGR of 32.1% in 2017-2022, and the proportion of overseas revenue has increased from 50% in 2020 to 60% in 2022.

3) forklift motorization and cart strategy are the key development directions: at present, the company's market share of large trucks is less than 4%, and there is plenty of room for growth. The company takes advantage of the trend of electric industrial vehicles and focuses on resources to actively expand the production capacity of large vehicles. The company's light and small forklift truck has maintained a leading position in the global market, has established a sound overseas channel, superimposed the trend of lithium forklift truck going to sea, and the growth of the company's large lithium forklift truck business is expected.

Intelligent logistics systems: extension to become a leader in internal logistics solutions in the field 1) according to AIoT, the global warehousing automation market is expected to reach $100 billion by 2027, with a CAGR of 15 per cent between 2022 and 2027. The domestic warehousing automation market is expected to exceed 100 billion yuan in 2023, accounting for about 30% of the global market, with an annual compound growth rate of 21%, which is higher than the global growth rate.

2) the company wholly acquired the highly competitive Zhongding Integration and French SAVOYE to achieve epitaxial development. Zhongding Integration is the largest supplier of stacker in China, and SAVOYE of France is the industry leader in intelligent warehousing and logistics system solutions. The company's intelligent logistics system business newly signed orders of 4.5 billion (excluding tax) in 2022, providing a strong support for performance growth.

Profit forecast and valuation

It is estimated that the company's net profit from 2023 to 2025 will reach 5.0,6.50 and 760 million yuan respectively, an increase of 24.2%, 29.7% and 17.6% over the same period last year; the corresponding PE is 11, 8 and 7 times. Maintain a "buy" rating.

Risk hints: raw material price fluctuation risk; market competition aggravating risk; export condition deterioration risk.