Incidents:
On August 14, 2024, Beite Technology released its 2024 mid-year report: in 2024, H1 achieved revenue of 0.97 billion yuan, +14.1% year on year; net profit of 0.038 billion yuan, +101.6% year on year; net profit after deducting non-return to mother 0.032 billion yuan, +143.7% year on year, of which 2024Q2 achieved revenue of 0.481 billion yuan, +4% year on year; net profit to mother 0.021 billion yuan, year-on-year + 65.2%; net profit after deduction was 0.017 billion yuan, +86.5% year-on-year.
Investment highlights:
In 2024, H1's revenue grew steadily, and the “chassis parts & export business” was two-wheel drive.
In 2024, H1 achieved revenue of 0.97 billion yuan, +14.1% year-on-year. Mainly thanks to the company's chassis parts business on a steady basis, some new products have been mass-produced one after another to gain incremental growth (IPB-Flange, the core component of Bosch's intelligent integrated braking system, ZF CDC damping control valve parts, Nexteer racks, etc.). In addition, the company seizes export market opportunities, makes full use of existing partnerships with large global auto parts suppliers, and actively expands overseas business. In 2024, H1 achieved 70.87 million yuan in export revenue of 70.87 million yuan, an increase of 10.76% over the previous year.
In 2024, H1's net profit grew rapidly, and gross margin & net margin improved year-on-year.
In 2024, H1 achieved net profit to mother of 0.038 billion yuan, +101.6% year on year; gross profit margin 19.2%, +1.47pct year on year; net profit margin of 3.91%, +1.79pct year on year. The profit growth rate is faster than the revenue growth rate, mainly due to the continuous release of scale effects due to the increase in operating income. At the same time, combined with continuous optimization in conjunction with internal cost reduction, the company's profitability has increased comprehensively.
The product matrix continues to improve, and the release of new products is expected to enhance the company's performance. The company continues to increase investment in R&D. Through industry-university-research cooperation, the company focuses on research and development of a series of projects such as technical route compressors compatible with various new refrigerants such as CO2 and R290, integrated thermal management systems (8-13KW) of various models, controllers for electric compressors, and Sic controllers. In addition, the company continues to cooperate with customers to develop various types of screw components, including nuts, planetary rollers, screws, gear rings, etc., which are used in humanoid robot actuators and automobile rear wheel steering systems (RWS). Currently, a full-process production line for humanoid robots has been completed. We believe that the company's product matrix continues to improve, and the company's performance is expected to increase in the future with the successful development and mass production of new products.
Profit forecast and investment rating Considering the continuous release of new products in the company's various businesses in the future, and the combined cost reduction and efficiency work progresses smoothly, we expect the company to achieve total operating income of 2.138, 2.498, and 3.119 billion yuan in 2024-2026, with year-on-year growth rates of 14%, 17%, and 25%; realized net profit to mother 0.084, 0.114, 0.182 billion yuan, with year-on-year growth rates of 65%, 35%, and 60%; EPS is 0.23, 0.32, 0.51 yuan, corresponding to the current stock price of PE The valuation was 68, 50, and 32 times, respectively, maintaining a “buy” rating.
Risks suggest that raw material prices continue to rise; NEV sales fall short of expectations; production capacity at new plants falls short of expectations; customer concentration is too high; new product development progress falls short of expectations; and the risk of large fluctuations in secondary market liquidity and stock prices for small market capitalization companies.