Key points of investment
23H1's net profit increased by 16%, and the performance was in line with market expectations. The company's 23H1 revenue was 350 million yuan, 42%, net profit attributable to the same increase of 160 million yuan, 16%; Q2 revenue was 190 million yuan, +21%/+14%, net return profit of 0.3 million yuan, same period -11%/+4%, minus non-net profit of 225 million yuan, -14% month-on-month, gross profit margin 52%, same month over month ratio +5.5/+0.9 pct, return net interest rate 17.3%. The company's Q2 gross margin level was maintained, mainly due to the Q2 gross profit increase of RMB 0.08 billion Equity incentives If expenses were added back, the net profit for Q2 was 0.4 billion yuan, +10%/29% over the same period. The performance was in line with market expectations.
The revenue of pole ear welding is expected to grow by 20-30% throughout the year, and the profit level is maintained. The company's 23H1 pole ear welding estimated revenue was 2-250 million yuan, an increase of 59%. Although the expansion of production by downstream battery factories decelerated, the company's domestic market share increased to 50%, and is expected to contribute about 400 million yuan in annual revenue, an increase of 25%. The overall gross profit margin of the company H1 is 52%, of which the Q2 gross profit margin is 52%, a year-on-year increase of 0.9 pct. The gross margin is expected to remain stable. In addition, consumables are expected to contribute 130 million yuan in annual revenue, an increase of 30% +, and a gross profit margin of 50-60%, which is expected to contribute to continued cash flow.
Safety requirements for power batteries are becoming stricter, and orders for composite fluid collection roller welding are expected to be implemented soon. In July, the two domestic departments emphasized resolutely curbing the occurrence of safety accidents involving new energy vehicles. In September, Europe required a new target point for power batteries to meet the requirement of no heat diffusion for 5 minutes. The safety requirements for power batteries became stricter, and the trend was for composite fluid collectors. The 24-year battery demand may exceed 50 GWh. The company has in-depth cooperation with the leading battery factory. The Q3 roller welding equipment is expected to be ordered and used at the European base. It is expected to be the first to use composite aluminum foil. The welding machine has a single GWh monopolar value of 4 to 5 million yuan. The gross margin is expected to be higher than that of spot welding equipment. Starting in 24, the flexibility is obvious in 25 years, and the revenue share is expected to rise to 20% +.
The volume of high-voltage harnesses+IGBTs began to be released, and is expected to double continuously in the future. The localization rate in the new field of wire harness/IGBT is low. Compared with the price and profit of a single unit, pole ear welding is higher, consumables are used more, and losses are faster. The company has exclusively broken through 120 flat welding technology. After the fast charging/high voltage terminal gradually matures, the company's products are expected to be fully profitable. Currently, it has received orders from mainstream wire harness manufacturers, and the total order volume has exceeded 100 million yuan.
High voltage wiring harness+IGBT is expected to contribute more than 50 million yuan in revenue this year, and revenue is expected to reach about 100 million yuan in 24, and is expected to double continuously.
Expense rates increased month-on-month, and cash flow gradually improved. 23H1 company's period expenses were 110 million yuan, an increase of 55%, of which equity incentive expenses affected 08 billion yuan, 23Q2 company period expenses were 60 million yuan, the period cost rate was 32.7%, an increase of 6.1 pct. Among them, the R&D/sales rate increased by 4.2/2.8 pct to 16.5%/11.1%; 23Q2 final inventory was 198 million yuan, a decrease of 23.5% from the beginning of the year; accounts receivable were 180 million yuan, up 74.1% from the beginning of the year, contract liabilities were 38 million yuan, down 64% from the beginning of the year; 23H1 Net cash flow from operating activities was $08 billion, a significant improvement over the previous year. Of this, net cash flow from operating activities was $0.2 billion in 23Q2, which was positive from month to month.
Profit forecast and investment rating: Due to the slowdown in the expansion of production by downstream battery manufacturers, we lowered the company's 23-25 net profit forecast to 1.3/2.0/350 million yuan (previous value: 1.7/26/4.1 billion yuan), an increase of 18%/54%/75%, corresponding to PE 77/50/29x, maintaining the “buy” rating.
Risk warning: New technology progress falls short of expectations, electric vehicle sales fall short of expectations, and cooperation with major customers is not progressing smoothly.