Key points of investment

Event: The company released a semi-annual performance forecast for 2024. In the first half of 2024, the company expects to achieve net profit of 0.4 billion yuan to 0.42 billion yuan, an increase of 40.12% to 47.12% over the previous year. It is estimated that net profit after deduction will be 0.35 billion yuan to 0.37 billion yuan, an increase of 35.36% to 43.09% over the previous year.

The company's overall performance for the first half of 2024 was in line with our expectations.

Continuing to reduce costs and increase efficiency, the company achieved a high year-on-year increase in 2024H1 performance. The company's 2024H1 is expected to achieve net profit of 0.4 billion yuan to 0.42 billion yuan, an increase of 40.12% to 47.12%; of these, 2024Q2 is expected to achieve net profit of 0.208 billion yuan to 0.228 billion yuan, an increase of 30.82% to 43.40% year over year, and 8.33% to 18.75% month on month. The company's 2024H1 performance achieved a year-on-year increase mainly due to: 1. Continued promotion of cost reduction and efficiency measures to improve operational efficiency; 2. Overseas factory operations continued to improve, profitability improved, and the North American sector turned a year-on-year loss into a profit; 3. The share and value of all business segments increased, driving continuous order growth.

The four core advantages of “technology+product+layout+customer” help the company develop its new energy thermal management business rapidly. In terms of R&D, the company continues to step up its efforts, concentrates superior resources to build a global R&D system, and focuses on the direction of thermal management for new energy vehicles. In terms of products, the company has a “1+4+N” comprehensive product layout in the field of new energy thermal management, and continues to strengthen the industrial and civil markets to achieve the advance layout of the third curve. In terms of layout, the company adheres to an international development strategy and continues to promote production and technical service platforms in various overseas markets to better provide localized services to global customers. In terms of customers, the company's new energy thermal management business covers high-quality customers such as internationally renowned electric vehicle companies, CATL, Geely, and Wei Xiaoli, fully enjoying customer development dividends.

Profit forecast and investment rating: We maintain the company's 2024-2026 net profit forecast of 0.849 billion yuan, 1.113 billion yuan, and 1.371 billion yuan. The corresponding EPS was 1.03 yuan, 1.34 yuan, and 1.66 yuan, respectively. The price-earnings ratios for 2024-2026 were 16.54 times, 12.62 times, and 10.24 times, respectively, maintaining the “buy” rating.

Risk warning: New energy passenger vehicle sales fall short of expectations; fluctuations in raw material prices affect profits.