Event: On July 1, the company released the 2024 semi-annual performance forecast. 2024H1 achieved net profit of 88 million yuan to 95 million yuan, a year-on-year increase of 63.63%-76.65%; realized net profit deducted from mother of 86.5 million yuan to 93.5 million yuan, an increase of 65.68%-79.06% over the previous year. 2024Q2 achieved net profit of 3605-4305 million yuan to mother, an increase of 54%-84% year-on-year.
The number of orders continues to grow, driving revenue growth, and gross margin will continue to rise: by the end of May 2024, the company's newly targeted projects have reached the total number of projects undertaken in 2023, and the 2024 plan to undertake new targeted projects is about 200% of the total number of projects for the full year of 2023. The exclusively supplied Extreme Krypton 001 and Extreme Krypton 007, the Smart World S7 and the Intelligent S9 in collaboration between Huawei and Chery, and the Enjoy S9 in collaboration between Huawei and BAIC are all mass-produced or will be mass-produced this year. With the development of the NEV industry, the number of customer orders continues to grow, driving the company's revenue to continue to increase; the company continuously optimizes product performance and quality to improve the product yield; in addition, as revenue grows, the cost ratio has also declined. In the next few years, as the company continues to expand projects with high levels of raw materials, gross margin will continue to recover upward.
Target outstanding customers in the domestic industry and promote production capacity construction: The company's strategy is to firmly target leading domestic car companies, including new energy vehicle manufacturers and new car builders, and obtain fixed sites for development as soon as possible.
According to the customized needs of high-end customers, we will accelerate the introduction and deployment of first-class international and domestic production equipment and R&D equipment, promote capacity construction and R&D capacity improvement, and build 2.5 billion yuan of advanced production capacity within three years to meet the good situation of future business growth. At the same time, the company reported to the local government to obtain nearly 90 acres of land on the north side of the company by 2024. Construction is expected to begin in 2025, and a total production capacity of 4 billion yuan can be formed in Xianju in the future.
Investment advice: We expect the company to achieve net profit of RMB 2.10/255/309 million in 2024-2026.
The corresponding PE was 20.23/16.60/13.71 times, respectively, maintaining the “gain” rating.
Risk warning: Order delivery falls short of expectations; industry competition increases risk; macroeconomic downside risk.