In the first half of the year, the revenue reached 21.558 billion yuan, + 25.14% compared with the same period last year; the net profit returned to the mother was 1.092 billion yuan, + 45.21% compared with the same period last year; and the non-return net profit was 908 million yuan, + 79.92% compared with the same period last year.

Looking to the future, we expect that the main lead-acid business is expected to maintain medium-and high-speed growth, the pace of lead-carbon energy storage is expected to accelerate, and lithium energy storage still needs to build a bottom to wait for further optimization of the industrial supply and demand pattern and maintain the "buy" rating.

The main business steadily boosted profits. In the first half of the year, the revenue was 21.558 billion yuan, + 25.14% compared with the same period last year, the net profit was 1.092 billion yuan, + 45.21%, and the non-return net profit was 908 million yuan, + 79.92% compared with the same period last year. Among them, 2023Q2 achieved revenue of 10.806 billion yuan, year-on-year + 24.09%, month-on-month + 0.51%; return-to-mother net profit 475 million yuan, year-on-year + 50.63%, month-on-month-23.14%; deduction of non-return net profit 376 million yuan, year-on-year + 121.14%, month-on-month-29.28%. The company's overall revenue and profit performance was good in the first half of the year, mainly because the lead-acid business of the two-wheeler was very sound.

Lead and acid business is high, lithium electricity is under pressure in stages. In terms of lead storage, the company's lead storage battery income in the first half of the year was 20.2 billion yuan, which was + 36.3% compared with the same period last year. In addition, the company's lead-carbon battery revenue of 240 million yuan, 208.9% year-on-year, faster than the energy storage industry as a whole, lead-carbon energy storage returned to the mainstream perspective in the first half of the year, especially in the industrial and commercial energy storage field near the urban area. On the one hand, the company speeds up the construction of lead-carbon energy storage capacity, and in March, the world's largest lead-carbon energy storage power station has been put into operation to accumulate operational experience. In terms of lithium power, the revenue in the first half of the year was 370 million yuan,-53.4% compared with the same period last year. The company has launched energy storage battery products 100Ah-305Ah and various energy storage boxes such as air-cooled and liquid-cooled, but the sharp intensification of competition in the domestic and foreign energy storage market in the first half of the year has affected the rhythm of the order. In other new businesses, the company has increased investment in Sodium Power, has released the first generation of sodium battery sodium T1 products, and expanded the market to Southeast Asia and so on.

The company's profitability is restored, and R & D and staff investment are increased. In the first half of the year, the company's overall gross profit margin is 19.0%, year-on-year + 1.9pcts, of which the second-quarter gross profit margin is 18.8%, year-on-year + 1.8pcts, month-on-month-0.4pct. We expect the gross profit margin to remain stable in the second half of the year. In the first half of the year, the company's sales / management / financial expense rates were 3.0%, 2.8%, 0.8%, 0.3%, respectively, compared with the same period last year. The overall change was little, and the decrease in financial expenses was mainly due to the increase in interest income of the company. In the first half of the year, the company achieved a net profit rate of 5.1%, which was + 0.7pct compared with the same period last year, mainly due to the increase in gross profit margin and the reduction of financial expenses.

Risk factors: lead battery market demand is lower than expected; upstream costs of energy storage such as lithium carbonate continue to rise, resulting in lower energy storage costs than expected, resulting in lower than expected economic improvement of energy storage; the company's lithium power production capacity is faster than expected and the target capacity is difficult to achieve; the company's core technology, brain drain and R & D patents are at risk of leakage. The company's hydrogen fuel cell is still in the development and testing stage, and the speed of commercialization may be lower than expected.

Earnings forecast, valuation and rating: the company has two-wheel drive of lead acid + lithium power, the lead-acid business is improving steadily, and the lithium business continues to accumulate. According to the report data, we slightly adjust the company's 2023-2025 homing net profit forecast to 24.34pm 30.64pm 3.604 billion yuan, corresponding to the EPS forecast of 2.503lash 15lash 3.71yuan (the original forecast is 2.33Plus 2.76ppm 3.11 yuan), and the current price corresponds to 14-11-10 times PE. The company's lead and acid business bottomed out, lithium energy storage and other new business is expected to usher in capacity release to start a second growth. Maintain the company's "buy" rating.