Performance was in line with expectations. The company's revenue for the first half of the year was 2,879 million yuan, up 27.5% year on year; net profit of 339 million yuan, up 9.2% year on year; net profit after deducting non-return net profit of 368 million yuan, up 25.0% year on year. Revenue for the second quarter was 1,507 million yuan, up 32.8% year on year, up 9.8% month on month; net profit for the second quarter was 185 million yuan, up 10.8% year on year, up 20.2% month on month; net profit without return net profit of 230 million yuan, up 44.4% year on year and 66.9% month on month. Non-recurring profit and loss for the first half of the year was $29.31 million, of which income from changes in fair value generated by derivative financial instruments was 5.111 million yuan. It is expected to be mainly due to losses in foreign exchange contracts held by the company at the end of the period.
The gross margin increased month-on-month in the second quarter, and the expense ratio increased slightly. The gross profit margin for the first half of the year was 27.8%, up 0.4 percentage points from the previous year; the gross profit margin for the second quarter was 28.1%, up 1.2 percentage points from the previous year, and 0.6 percentage points from the previous year.
The cost rate for the first half of the year was 11.9%, up 0.6 percentage points from the previous year. Among them, the financial expense ratio increased by 1.2 percentage points year on year, mainly due to the increase in interest expenses in the current period and the large amount of exchange earnings in the previous period. Net cash flow from operating activities for the first half of the year was 85 million yuan, a year-on-year decrease of 8.3%.
Convertible bonds have been successfully issued, and it is expected that the ceiling business will become an elastic place for the company's future profit growth. The issuance of the company's 908 million yuan convertible bond project was completed in July. The funds raised will be used for the Mexican roof base construction project and the Zhoushan ceiling product construction project. According to the company's convertible bond raising instructions, the unit prices of the company's roof and ceiling system products are 700 yuan/set and 4,000 yuan/set respectively, which is far higher than the company's existing products; the Mexican project's post-delivery gross profit margin and net interest rate are 28.0% and 13.3%, respectively, and the Zhoushan project's post-delivery gross profit margin and net interest rate are 28.3% and 15.1% respectively. It is expected that the gross profit margin and net interest rate of the roof project will be higher than the company's current level after delivery; the Mexican project will add 300,000 sets of integrated roof system products per year. Annual sales Revenue is 1.62 billion yuan; after delivery, the Zhoushan project will add 700,000 sets of ceiling products per year, and is expected to add 490,000 million yuan in annual sales revenue. After the project is put into operation, it will greatly contribute to the company's future revenue and profit growth. It is expected that the ceiling business will become the company's main revenue and profit growth point in the future.
The market for ceiling products is broad, and it is expected that Tesla's share of supporting revenue will gradually increase. According to the company's announcement, the company's roof and roof system integration products have been officially designated as projects from customers such as Company A, Company B, Ford, and GM. The orders in hand cover nearly 50% of the production capacity of the fund-raising projects, and they are still collaborating with customers to develop other projects simultaneously. In the context of the transformation and development of new energy vehicles around the world, world-renowned automakers such as Tesla, Rivian, GM, and Ford have put forward development strategies and expectations for the electrification trend. It is expected that sales of new energy vehicles in North America will usher in rapid growth, providing broad development space for the company's roof business. According to questions and answers from the company's investors, the company has supplied integrated roof system products to Tesla. With the launch of Tesla's Mexican plant and the gradual mass production of new models such as the Cybertruck and next-generation models, it is expected that the company will also continue to receive designated points for new Tesla model roof projects, and Tesla's supporting sales revenue is expected to gradually increase as a share of the company's total revenue.
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It is predicted that the company's net profit for 2023-2025 will be 864, 10.97, and 1,386 million yuan respectively, which is 32 times the average valuation of the company's PE in 23 years, and the corresponding target price is 21.76 yuan, maintaining the purchase rating.
Risk warning
The passenger car industry's sales volume fell short of expectations, the penetration rate of new energy vehicles in the North American market fell short of expectations, the sales volume of new energy vehicles of Tesla and other car companies fell short of expectations, and the supply of passenger car sun visors, headrests, and ceiling products fell short of expectations.