occurrences

The company released its 2024 semi-annual report. In the first half of the year, it achieved operating income of 0.873 billion yuan, a year-on-year increase of 15.2%; gross profit of 35.78%, a year-on-year increase of 5.2%; net profit of 0.218 billion yuan, up 47.5% year on year; net profit after deducting non-return to mother 0.214 billion yuan, an increase of 55.2% year on year; in a single quarter, Q2 achieved operating income of 0.502 billion yuan, an increase of 35% month-on-month, and a gross profit margin of 36.53%, up 1.8% year on year. Net profit was 0.118 billion yuan, up 17.5% month-on-month, and net profit not attributable to mother was 0.131 billion yuan, up 56.3% month-on-month.

Key points of investment

High-cost inventory accelerates the removal and superposition of the expansion of emerging application fields, and gross margin is expected to increase further. The company continued to optimize its product structure, market structure and customer structure, and actively plan and find more new customer opportunities in new markets. In the first half of the year, it achieved operating income of 0.873 billion yuan, an increase of 15.2%; gross profit of 35.78%, up 5.2% year on year; net profit of 0.218 billion yuan, up 47.5% year on year; net profit after deducting non-return to mother 0.214 billion yuan, an increase of 55.2% year on year; in a single quarter, Q2 achieved operating income of 0.502 billion yuan, an increase of 15.2% year on year 35%, gross profit margin was 36.53%, up 1.8% month-on-month, net profit to mother was 0.118 billion yuan, up 17.5% month-on-month, after deducting non-return net profit of 0.131 billion yuan, up 56.3% month-on-month. The company's overall inventory level continues to drop, and the inventory structure has also changed markedly. High-cost IGBT stocks are being digested faster, and medium- and low-voltage MOS has entered a very good circulation stage. With the elimination of high-cost inventories and continued strength in high-threshold fields such as automobiles and AI computing power, the company's gross margin is expected to increase further.

Sales of medium- and low-voltage MOS have increased significantly, and photovoltaic IGBTs are gradually picking up. The downstream market gradually recovered, and demand in emerging application fields such as automotive electronics and AI servers increased significantly. Some of the company's SGT-MOS products were in short supply or continued to be ordered. The 2024H1 SGTMOS achieved sales revenue of 0.36 billion yuan, an increase of 40.29% over the previous year, and the sales share increased from 33.95% in the same period last year to 41.44%. It is expected that the sales volume of SGT products will continue to increase in the second half of the year; Driven by traditional application demand such as industrial control and pan-consumption, the 2024H1 Trench- MOSFET products achieved sales revenue of 0.255 billion, a year-on-year increase of 19.64%, and the sales share increased from 28.15% in the same period last year to 29.30%; IGBT products were affected by overall inventory removal from downstream customers, and demand weakened. 2024H1 achieved sales revenue of 0.141 billion yuan, a year-on-year decrease of 22.64%; the sales share fell from 24.07% in the same period last year to 16.20%. It is expected that photovoltaic IGBT products will pick up further in the second half of the year, while new products have high current IGBT single tube sales will increase compared to the first half of the year.

Investment advice:

We expect the company's 2024-2026 net profit of 0.46/0.59/0.7 billion yuan to maintain a “buy” rating.

Risk warning:

Market recovery fell short of expectations; industry competition increased risks; customer imports fell short of expectations.