Incident: Sanhua Intelligent Control announced the 2024 semi-annual results forecast. The company expects 2024H1 to achieve revenue of 13.16 billion yuan to 14.41 billion yuan, YoY +5.0% to +15.0%; realized net profit of 1.46 billion yuan to 1.60 billion yuan, YoY +5.0% to +15.0%; after conversion, 2024Q2 achieved revenue of 6.72 billion yuan to 7.97 billion yuan in a single quarter, YoY -2.0% to +16.3%; realized net profit to mother of 8.2 billion yuan to 960 million yuan, YoY +2.9% to +20.5%. We believe that Q2 Sanhua refrigeration parts revenue continued to grow, the auto parts business performance was stable, and the operating performance in a single quarter was good.
Q2 refrigeration parts revenue continues to grow: Since the beginning of the year, air conditioning manufacturers have been actively scheduling shipments, driving a continuous increase in demand for upstream refrigeration components. We infer that Q2 Sanhua refrigeration parts revenue is growing steadily. For reference, according to industry online data, the cumulative sales volume of Sanhua stop valves, four-way valves, and electronic expansion valves YoY was +4.1%/+11.2%/+22.2% in April-April. Looking ahead, as energy saving and environmental protection requirements increase, the share of high-efficiency inverter air conditioners is expected to drive continuous growth in demand for electronic expansion valves. As a global refrigeration control components industry, Sanhua will fully benefit from increased industry demand.
Q2 Auto Zero business performance was stable: According to data from the China Association of Automobile Manufacturers, the cumulative production and sales volume of new energy vehicles in April-May was 1.85 million units/1.81 million units, respectively, and YoY +33.4%/+33.8%.
Sanhua is a leading global thermal management company for new energy vehicles. Using the benchmark customer demonstration effect, we infer that the Q2 Sanhua auto parts business has been operating steadily.
Investment advice: Sanhua Intelligent Control is a global leader in refrigeration control components and thermal management system control components for new energy vehicles. The company continues to expand high-potential fields such as robots and energy storage, and revenue performance is expected to increase rapidly. We expect the company's EPS to be 0.91/1.11/1.27 yuan from 2024 to 2026, maintain a buy-A investment rating, and give the company a 2024 PE valuation of 30x, which is equivalent to a six-month target price of 27.45 yuan.
Risk warning: RMB appreciates sharply, raw materials prices rise sharply, foreign trade environment deteriorates