Incident: The company released its 24-year report. The company's revenue was 7.231 billion yuan, up 8.89% year on year; net profit attributable to shareholders of listed companies was 0.844 billion yuan, up 15.33% year on year; net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 0.786 billion yuan, up 4.20% year on year.
The market share of relays is stable, and R&D innovation continues to increase. 24H1's relay product revenue was 6.494 billion yuan, +8.00% year on year, gross profit margin 36.15%, and -0.72 pct year on year. During the reporting period, 193 new product projects were set up and developed in the relay category, an increase of 16% over the previous year. Product technology innovation and intellectual property layout were promoted in collaboration. In the first half of 2024, 412 patents were applied for in the relay field, of which 199 were invention patents, accounting for 48%. There are 94 domestic invention patents and 105 international invention patents.
Downstream relay market trends are improving: 1) Consumer electronics sector: As major customers end their inventory, demand in the signal relay market has recovered, achieving a slight increase over the previous year, and is expected to maintain a moderate restorative growth trend throughout the year. 2) Industrial equipment sector: The manufacturing industry's “removal of production capacity and inventory removal” trend has improved, and demand in the industrial relay market has recovered. The decline narrowed markedly from the previous quarter, and gradually stabilized and improved. 3) Power and energy sector: The company is currently full of orders, and the capacity utilization rate has exceeded 90%. In addition, benefiting from the rapid increase in global smart meters and the continued increase in market share, the company's power metering relay business has grown rapidly. 4) Automobile transportation sector: The market share of the company's weak current vehicle relay business increased significantly, showing rapid year-on-year growth; the NEV high voltage control box project progressed smoothly, helping to continuously expand new application markets for HVDC relay products.
The “75+” strategy promotes high-quality development of new categories of products: 1) Low-voltage appliances: Form new growth points by developing new energy, industrial, and power grids application markets. 2) Film capacitors: In January-June, the company's film capacitor shipments increased 20% year-on-year, and evaporation capacity has reached 85% in terms of future capacity building in the thin-film capacitor industry chain, laying a good foundation for subsequent development. 3) Connectors: From January to June, the company's external connector business increased 129% year-on-year, and profitability improved. 4) Current sensors: From January to June, the company's current sensor shipments increased 118% year on year. Among them, sales of current transformers in the State Grid, Indonesia, Europe and Australia all gradually increased. 5) Fuses: Products have been verified in some projects for customers in energy storage and photovoltaics, etc., and small-batch delivery is expected to begin in the second half of the year.
Investment advice: We expect the company to achieve revenue of 14.981/17.345/20.089 billion yuan in 2024-2026, net profit to mother of 1.645/1.915/2.258 billion yuan, EPS 1.58/1.84/2.17 yuan respectively, and PE 17.75/15.25/12.94 times, maintaining the “recommended” rating.
Risk warning: The horizontal expansion of the product line falls short of expectations, and overseas production capacity construction falls short of expectations.