The company's 2024 mid-year report forecast exceeded expectations
The company released the 2024 mid-year report forecast. In the first half of 2024, it is expected to achieve net profit of 7.67 to 0.899 billion yuan, +75% to 105% year over year, exchange earnings of 0.21 billion yuan in the first half of 2023, +239% ~ 297% YoY after exclusion, after deducting 7.38~0.87 billion yuan of non-net profit, +100% ~ 135% YoY. Q2 is expected to achieve net profit of 4.49 to 0.558 billion yuan, down 25.6% to 3.8% year on year, +31% to 69% year on year after excluding exchange profit and loss, and Q2 median return value of 0.514 billion yuan, a year-on-year decrease of 15%. Excluding exchange profit and loss of +50% year over year, the performance exceeded expectations.
We raised the 2024-2025 net profit forecast from 1.602 and 2.095 billion yuan to 1.743 and 2.124 billion yuan, and added the 2026 net profit forecast of 2.504 billion yuan. The current stock price corresponding to 2024-2026 PE is 19.7, 16.2, and 13.7 times, respectively, to maintain a “buy” rating.
Downstream demand for consumer batteries continues to pick up
According to Techinsights, global sales of 2024Q1 smartphones were 0.295 billion units, up 10% year on year. Among them, Xiaomi sold 0.04 billion units, up 34% year on year. According to Counterpoint data, the 2024Q2 Xiaomi global market share reached 14%, up 2 pct year on year, and the market share continued to increase; the global sales volume of the 2024Q1 laptop was 46.1 million units, up 6.5% year on year, and downstream demand for consumer batteries continued to pick up . We expect that the renewal cycle brought about by PC purchases in the early stages of the pandemic will drive the growth of the laptop market. The return of domestic mobile phones such as AI phones and Huawei will stimulate smartphones to enter a new cycle of switching, and downstream demand for consumer batteries is expected to continue to pick up.
The high-end product spectrum of mobile storage is perfect, and shipments are expected to continue to be released
The company's high-end product spectrum has been improved. In the BEV field, ultra-fast charging 4C battery products have been mass-produced and commercialized, and the development of 5C~6C next-generation “flash charging” batteries is progressing smoothly; in the hybrid field, the company layout covers 100-200KM plug-in hybrid battery products; in the field of energy storage, it has released 314Ah high-capacity long-life batteries with a cycle time greater than 12,000 cycles, which has been recognized by first-line customers. It is expected that future shipments of dynamic storage batteries will continue to increase.
Risk warning: New energy vehicle sales and energy storage installations fell short of expectations, competition for dynamic storage batteries intensified, and the targeted expansion of the company's customers fell short of expectations.