Description of the event

The company released its 2024 semi-annual performance report. 2024H1 achieved revenue of 3.472 billion yuan, an increase of 3.61%; realized net profit attributable to mother of 0.24 billion yuan, an increase of 8.25%; and realized net profit of 0.199 billion yuan without return to mother, an increase of 4.05%.

Incident reviews

Revenue and performance are improving steadily, the integrated business is being dragged down, and the forklift business is contributing to growth.

The company's two major subsidiaries related to the smart logistics integration business, Zhongding Integrated 2024H1 achieved net profit of 52.4028 million yuan, an increase of 8.8%; French company SAVOYE achieved net profit of 34.1499 million yuan in 2024H1, which changed profit from profit to loss. Taken together, the smart logistics integration business was a drag on performance in the first half of the year, and the forklift business contributed to growth.

Both gross profit margin and expense ratio have declined. 2024H1, the company's gross margin decreased by 0.58pct year-on-year to 21.77%. In terms of cost ratio, the company's expense ratio decreased by 1.07pct to 13.20% year-on-year during the 2024H1 period, including the sales expense ratio increased 0.55pct to 5.30%; the management expense ratio decreased by 0.41pct to 5.02%; the financial expenses ratio also decreased by 1.09pct to -0.71%, mainly due to changes in the Russian ruble exchange rate; and the R&D expense ratio also decreased by 0.12 pct to 3.58%.

Actively promote the big car strategy and create new growth points. The company focuses on resources to actively expand the production capacity of large vehicles, fully supports measures such as improving the serialization and hierarchical research and development of large car products, improving and perfecting the domestic and international marketing system for large vehicles, optimizing and building a relatively complete supply chain system, establishing a comprehensive customer management system, and actively cultivating and introducing high-end talents to respond positively to customer needs, ensure the sustainable development of the truck strategy, and create new growth points.

Smart logistics integrated business strengthens management+increases production capacity to ensure healthy future development. The company has strengthened effective control over domestic and overseas subsidiaries through team optimization, talent introduction, capacity expansion, optimization and collaboration. Zhongding Integrated strengthens technology upgrades, adjusts business structure, strengthens overall management, and plans to invest in new logistics equipment manufacturing bases; French SAVOYE is actively expanding new markets, building new factories, and expanding production capacity. Subsidiary companies within the smart logistics integration business have strengthened resource collaboration and actively carried out project cooperation, achieved effective integration of their resources, and laid a good foundation for further growth and development in the future.

Profit forecasting and valuation

The company's 2024-2026 revenue is expected to be 7.489, 8.067, and 8.627 billion yuan, with year-on-year growth rates of 7.56%, 7.71%, and 6.94%; net profit to mother is 0.501, 0.595, and 0.676 billion yuan, with year-on-year growth rates of 9.49%, 18.63%, and 13.70%. The company's 2024-2026 performance corresponding PE was 7.69, 6.49, and 5.70 times, respectively, maintaining a “buy” rating.

Risk warning:

The recovery of the small car market fell short of expectations; the advancement of the big car strategy fell short of expectations; market competition increased risks.