2024H1's performance grew steadily, optimistic about the increase in revenue brought about by the release of new products; maintaining the “buy” rating of 2024H1, the company achieved revenue of 2.865 billion yuan, +9.16% year on year; net profit to mother 0.425 billion yuan, +3.43% year on year; net profit after deducting 0.422 billion yuan, +3.04% year on year; gross profit margin 29.63%, -0.48 pcts year on year; 2024Q2 achieved revenue of 1.537 billion yuan in a single quarter, year on year + 16.96%, +15.75% month-on-month; net profit to mother 0.244 billion yuan, +6.75% month-on-month, +35.36% month-on-month; deducted non-net profit of 0.234 billion yuan, +2.11% YoY, +24.66% month-on-month; gross profit margin 31.32%, +1.80pcts YoY, +3.65pcts month-on-month. Due to demand recovery falling short of expectations, we slightly lowered 2024-2026 net profit to mother of 0.985/1.16/1.502 billion yuan (previous value was 1.018/1.36/1.668 billion yuan), corresponding PE 20.0/17.0/13.1 times. We are optimistic about the sufficient growth brought about by the gradual launch of the company's new products, and maintain a “buy” rating.

The recovery in downstream market demand brought revenue growth. The end of the inventory phase + improved profitability of new product launches 2024H1 benefited from a moderate recovery in the semiconductor industry, strong demand in the domestic automotive electronics and consumer electronics industry, gradual improvement in the industrial market, and year-on-year growth in the company's revenue. At the same time, benefiting from the end of the 2024Q2 overseas market inventory phase, overseas customers increased their intention to purchase the company's products, and the company's gross margin increased steadily. By product, semiconductor devices achieved revenue of 2.47 billion yuan (revenue accounting for 86.19%), gross profit margin of 29.33%, year-on-year -0.82pcts; semiconductor chips achieved revenue of 0.238 billion yuan (revenue share 8.29%), -8.64% YoY, gross profit margin 26.88%, +4.93pcts; semiconductor silicon wafers achieved revenue of 0.098 billion yuan (revenue share 3.42%), YoY +7.74%, gross margin 19.10 %, +1.56pcts year over year.

Automotive electronics+has continued to be deployed in three and a half generations, and the gradual launch of products has brought sufficient growth in the automotive field. (1) N40V series: has successfully passed vehicle-level reliability verification, gradually passed major customer tests and entered the batch stage; (2) Vehicle module: The company's self-developed automotive silicon carbide modules have been developed and sampled, and it is expected that batch launch of the main driving silicon carbide modules produced nationwide will be completed in 2025. In the silicon carbide field, SiC MOS G1, G2, and GH series products have been developed and launched, and batch shipments have been achieved. We are optimistic about the sufficient growth brought about by the gradual launch of the company's automotive and silicon carbide products.

Risk warning: downstream demand falls short of expectations; customer introduction falls short of expectations; technology research and development falls short of expectations.