Event: when the company released its semi-annual report on August 25, 2023, 23H1 realized operating income of 6.531 billion yuan, an increase of 6.79% over the same period last year; net profit of 280 million yuan, an increase of 38.06% over the same period last year; net deduction of 245 million yuan, an increase of 0.58% per share; gross profit margin of 14.61%, an increase of 0.48pct and a net profit rate of 4.28%, and an increase of 0.82pct over the same period last year.
Comments: Q2 gross profit margin increased year-on-year, R & D expenses increased significantly. The company's 23Q2 achieved revenue of 3.236 billion yuan, a year-on-year / month-on-month growth rate of 7.78% and 1.79%, respectively, accelerating 1.93/12.65pcts. In terms of gross profit margin, although 23Q2 gross margin decreased 1.23pcts month-on-month, it increased 1.64pcts to 13.99% compared with the same period last year. In terms of expenses, the expense rate during the 23H1 period increased to 10.01% compared with the same period last year, mainly due to an increase of 35.95% to 118 million yuan in R & D expenses over the same period last year (mainly due to the increase in R & D costs for lithium battery projects), which led to an increase in 0.78pct to 1.81% over the same period last year. The rapid growth of lithium battery R & D costs is expected to enhance the company's lithium battery technology reserves and enhance the strength of the company's lithium battery business sector.
The lithium battery business is progressing smoothly and is expected to benefit from car electrification and energy storage. The company's automotive low-voltage lithium battery products include 12V new energy vehicle auxiliary battery, 24V parking air conditioning battery, 48V start-stop battery and standby power supply, energy storage battery and so on. In addition, the company has made remarkable progress in customer development. 23H1 has completed a total of 17 projects. In order to ensure future product delivery capacity and market demand, the company's low-carbon industrial park project (phase I) started construction in July this year, with an initial capacity of 4 million sets of low-voltage lithium batteries and 2GWh energy storage batteries. In the first seven months of this year, domestic sales of new energy vehicles were 3.89 million, an increase of 32.5% over the same period last year, and exports were 636000, an increase of 1.5 times over the same period last year. With the further development of automobile electrification, lithium battery business is expected to become a new growth pole of the company's business.
Lead-acid battery sales are growing rapidly, and the industry position is further stable. By the end of 23H1, the company's domestic and foreign lead-acid battery production capacity is about 3300 and 3.3 million KVAH / year respectively, and has a waste lead-acid battery recycling capacity of 860,000 tons / year. In July this year, the first phase of the company's American chemical plant project has been completed, with an annual production capacity of about 1 million KVAH. The cumulative sales of low-voltage lead-acid batteries in 23H1 reached 1623 million KVAH, an increase of 12.3% over the same period last year, including 1.5% in the mainframe market, 14% in the commercial vehicle market, nearly 50% in the parking air-conditioning battery and 8.7% in the overseas market. The company's market share in the mainframe market is about 48.6%. The market share of the domestic maintenance and replacement market has increased to 31%, and the industry's position has been further strengthened.
Profit Forecast: from 2023 to 2025, the company's operating income is estimated to be 150.88 Universe 16.774 billion Yuan, the net profit of the parent company is 7.87 billion Yuan, and the net profit of EPS 0.83 Plus is 1.00 Yuan, and the corresponding PE is 11.99 Universe 8.06 times respectively. Cover for the first time, giving a "buy" rating.
Risk hint: car sales fall short of expectations, and lithium business progress falls short of expectations.