On August 14, 2024, the company released its 2024 semi-annual report: the first half of 2024 achieved operating income of 0.97 billion yuan, +14.06% year over year, realized net profit of 0.038 billion yuan, +101.60% year over year, and realized net profit without return to mother 0.032 billion yuan, or +143.72% year on year.

Revenue side: The business structure continues to be optimized, and new businesses such as precision chassis processing and weight reduction have maintained high growth. 2024H1 achieved revenue of 0.97 billion yuan, +14.06% YoY. Among them, the chassis business achieved revenue of 5.71 billion yuan, +15.70% year over year, precision machining business revenue 0.115 billion yuan, +60.83% year over year; lightweight business revenue of 0.068 billion yuan, +36.09% year over year; and air conditioning compressor business revenue of 0.216 billion yuan, -3.39% year over year. The chassis precision processing business continues to receive leading Tier 1 (Bosch, ZF, Nexteer, etc.) targets, maintaining a high growth rate against the backdrop of successive releases of production capacity.

Profit side: large-scale effect+strengthening of internal management capabilities, continuous improvement in profit margin level. The 2024H1 company's gross margin was 19.20%, +1.46pct year on year, and the net profit margin was 3.91%, and +1.79pct year on year. Among them, the increase in gross margin is mainly due to an increase in the share of chassis and precision processing businesses with high gross margins. On the cost side, the total cost rate for the 24H1 period was 14.89%, of which the sales expense ratio was 3.03%, +0.67pct year on year, management expense ratio 5.26%, -0.40pct year on year, financial expense ratio 1.49%, -0.35pct year on year, R&D cost rate 5.11%, and +0.26pct year on year. Management and financial expense ratios are properly controlled.

The auto parts business continues to expand based on chassis, and the robotics business is progressing in an orderly manner. In the automotive sector, the company has been deeply involved in core chassis safety components such as steering, vibration damping, and brakes for many years, and has accumulated deep barriers in the fields of material research and development, processing, and manufacturing. Based on this, the company's customers cover leading mainstream companies such as ZF, Bosch, and Mando, and continue to expand into high-precision products with high gross margins. In the field of robotics, the company continues to cooperate with customers to produce samples of screw parts, including nuts, planetary rollers, screws, gears, etc., and focuses on building humanoid robot screw production lines. It has been possible for the company to independently complete production throughout the entire process and design and implement corresponding single-process automation solutions. Currently, it has sample production capacity.

Investment advice: The company has been deeply involved in the automotive chassis field for many years, and its products are expanding into high-precision parts, lightweight parts and screw business. According to the interim report's fine-tuning, revenue for 2024-2026 is estimated to be 2.173, 2.748, and 3.537 billion yuan, or +15.50%, 26.47%, and 28.70% YoY; net profit to mother is 0.75 (original value 0.76), 1.14 (original value 1.17), 1.69 (original value 1.75) billion yuan, +49.09% YoY. Based on the closing price of August 16, 2024, the company's current market value is 6.033 billion yuan, corresponding to 2024-2026 PE, 80.47X, 53.11X, and 35.62X respectively, maintaining an “gain” rating.

Risk warning: Downstream customer overseas expansion falls short of expectations, risk of humanoid robot development falling short of expectations, risk of impairment of goodwill, risk of untimely updating of research report usage information data.