Revenue has been growing steadily, and profits have increased significantly. The company released a performance forecast for the first half of 2024, and Daotong Technology continues to maintain a strong growth momentum. The company expects to achieve operating income of 18.3 to 1.85 billion yuan, up 26.41% to 27.79% year on year; net profit to mother is expected to be 3.8 to 0.4 billion yuan, up 101.03% to 111.62% year on year; and non-net profit deducted from mother is estimated to be 2.6 to 0.28 billion yuan, up 37.17% to 47.72% year on year. The company performed well in terms of revenue and profit, mainly due to the steady growth of its core business and the rapid expansion of emerging businesses.
The business segment performed well, and innovation drove growth. Looking at various business segments, the company's traditional digital maintenance business and new energy charging pile business all performed well. The traditional business continues to recover steadily, and market demand continues to pick up. The revenue from the traditional diagnostic business is estimated to be 14.6 to 1.47 billion yuan, an increase of more than 15% over the previous year; while the new energy charging pile business ushered in explosive growth, with an estimated revenue of 3.7 to 0.38 billion yuan, an increase of more than 80% over the previous year, becoming the company's new growth engine. The company's layout in the global market has been very effective, especially the expansion of overseas markets, making the revenue structure more diversified.
Traditional businesses have steadily recovered, and market share continues to expand. In traditional business areas, diagnostic products have a wide range of model coverage and excellent cost performance. In response to the automotive industry's growing demand for intelligent electronic components such as sensors, a series of self-developed diagnostic testing products have been launched to ensure the stable operation and efficient maintenance of automotive electronic control systems. Among them, TPMS and ADAS products are in line with the development trend of automobile intelligence, and the growth rate is more significant compared to comprehensive diagnosis. As the average age of overseas vehicles continues to rise, demand in the post-North American automobile market has expanded steadily, the traditional business market is stable, and it has shown a strong competitive advantage in foreign markets, which is expected to further increase market share.
The new energy charging pile business is developing rapidly, and the future can be expected. The company has signed contracts with many of the world's top 50 largest companies in the North American market; signed contracts with major customers such as top Asian car companies and Southeast Asian public utilities in the Asia-Pacific region, and obtained Singapore LNO/TR25 certification.
DC Fast and AC Ultra products are certified by Eichrecht, which is one of the few companies in China that have obtained this certification.
Build four major charging scenarios: household, destination, transit, and vehicle fleet, with AC/DC charging piles covering the 7KW to 640KW power range, providing rich application scenarios for the new energy charging pile business. It is expected that in the future, the company will continue to invest more in technology research and development and market expansion, and the charging pile business is expected to continue to develop rapidly.
Risk warning: international trade and business risks; demand for charging piles falls short of expectations; market competition intensifies.
Investment advice: Maintain an “better than the market” rating. Considering the rapid growth rate of the company's net profit in the first half of the year, we raised our profit. The estimated net profit for 2024-2026 is 0.522/0.662/0.831 billion yuan (the original forecast was 0.493/0.619/0.746 billion yuan for 24-26, respectively), corresponding to current PE 21/16/13 times, respectively. Considering that the company's charging pile business is expected to continue to grow at a high rate, it maintains a “superior to the market” rating.