Key points of investment
2024H1 revenue increased +5-15% year-on-year, and net profit to mother increased +5-15% year-on-year. The performance was in line with expectations. The company released a performance forecast for the first half of 2024. 24H1 is expected to achieve revenue of 131.55 billion yuan to 14.408 billion yuan, +5 to 15% year on year, and net profit to mother of 1,464 to 1,604 billion yuan, +5 to 15% year on year. According to the median estimate, 2024H1 revenue was 13.782 billion yuan, +10% year-on-year, net profit to mother of 1,534 billion yuan, +10% year-on-year, of which 24Q2 revenue was 7.342 billion yuan, +7% year-on-month, +14% month-on-month, and net profit to mother 886 million yuan, +12% year-on-year, and +37% month-on-month. Overall performance was in line with market expectations.
The auto parts business continues to grow, and benchmark customers are somewhat differentiated. From January to May 2024, China's passenger car production/wholesale/retail sales cumulative year-on-year ratio was +7.3%/+8.5%/+5.7%, respectively, and the performance was relatively stable. The company's core customers are divided. Sales of Tesla/BYD M1-5 were -7%/+27% year-on-year, and sales of GM and Ford also slowed to a certain extent. However, we expect the company to rely on the ASP increase and maintain the forecast of a 20% + increase in sector revenue for the whole year.
Demand in the refrigeration sector continues to recover, and the share of leading players is steadily increasing. At the industry level, from January to May 2024, China's air conditioner production totaled 130 million units, +16.7% year-on-year. The boom was maintained, but overseas interest rates rose, and related consumption may be suppressed. At the company level, the share of core products is steadily increasing, but we expect the export ratio to decrease, which will structurally reduce the sector's gross profit margin. Looking ahead to the whole year, domestic household appliance consumption continues to be high and overseas consumption is picking up, and revenue from the refrigeration sector is expected to increase by nearly 10% in '24.
The humanoid robot is about to be fixed, and the leading tier 1 is highly deterministic. The industrialization of humanoid robots has continued since March '24. Tesla has released the Optimus video three times in a row and has entered the field for practical training, and will be exhibited at the World Artificial Intelligence Conference in July. We expect 24H2 to complete supplier targeting and achieve mass production as soon as Q4. The company focuses on mechatronic actuators, fully cooperates with customers in product development, trial production and iteration, and has strong certainty in entering Tesla's supply system.
Profit forecast and investment rating: We maintain the company's 2024-2026 net profit of 35.3/42.4/5.16 billion yuan, respectively, +21%/+20%/+22% year-on-year, corresponding PE of 20x, 16x, and 13x, respectively, maintaining the “buy” rating.
Risk warning: NEV sales fell short of expectations, raw materials rose more than expected, competition intensified, humanoid robots fell short of expectations, etc.