Incident: The company released its 2024 semi-annual report, achieving revenue of 1.84 billion yuan, a year-on-year increase of 27.2%; realized net profit of 0.39 billion yuan, an increase of 104.5% over the previous year; and realized net profit of 0.29 billion yuan after deduction, an increase of 52.6% over the previous year.

Gradually going through the painful period of transformation, the growth logic was gradually realized. In April 2024, the company announced the completion of a 5% share transfer to its subsidiary Shenzhen Cybersecurity Technology, and its shareholding ratio was reduced to 46%. After the transaction was completed, Sai Fangtech was no longer listed. As a result, investment income of about 99 million yuan was included in the current period's non-recurring profit and loss. Looking at a single quarter, the company achieved revenue of 0.98 billion yuan in 2024Q2, an increase of about 32.0% year on year, and achieved net profit of 0.16 billion yuan without return to mother, an increase of about 40.2% year on year. Revenue and profit continued the good growth trend, and the reporting side returned to a healthy state.

Charging piles achieved sales breakthroughs, and traditional business demand picked up. The company's new energy charging pile business began to expand. In 2024, H1 achieved revenue of 0.38 billion yuan, an increase of 92.4% over the previous year. Currently, the company has built an AC/DC charging pile matrix covering 7kw-640kw, successfully signed a number of the world's top 50 large enterprise customers, and achieved sales breakthroughs in North America, Europe, etc.; the company's US factory has been officially built and put into operation, which is expected to reduce supply chain risks brought about by the Infrastructure Act in the future, and ushered in an inflection point in product scale.

At the same time, along with the recovery in overseas demand, traditional businesses achieved revenue of 1.44 billion yuan, up 18.0% year on year during the reporting period; among them, TPMS products increased 33.8% year on year, and ADAS standardized products increased 24.0% year on year.

The company continues to upgrade iterative plans according to user needs, and the competitiveness of traditional products is stable.

Improve quality and efficiency, focus on returns, and release a mid-term dividend plan. In order to implement the “Improve Quality, Increase Efficiency and Value Return” special action initiative, the chairman of the company proposed formulating and implementing a 2024 mid-term dividend plan. It is proposed to distribute a cash dividend of 4 yuan (tax included) to all shareholders for every 10 shares. Based on the current share capital situation, the total proposed cash dividend of 0.176 billion yuan (tax included) is proposed, demonstrating confidence in the company's future development prospects.

Profit forecasting and investment advice. Considering the huge gap between the supply and demand of overseas charging piles, along with the company's production capacity and channel construction maturity, it is expected that rapid implementation and volume will form a scale effect in the future; furthermore, the core competitiveness of the company's traditional business has not been weakened, and it is continuing to iterate in response to new demand. We are optimistic about the company's subsequent growth. EPS is expected to be 1.28 yuan, 1.47 yuan, and 1.97 yuan respectively in 2024-2026, maintaining a “buy” rating.

Risk warning: risk of worsening international trade situation; risk of exchange rate fluctuations; risk of rising raw material prices; supply chain risk; risk of increased industry competition, etc.