BOEVx's 1H24 revenue growth of 18% YoY was ahead of market expectations, while net profit decline of 15% YoY was largely in-line, mainly dragged by 1) higher expense for Chengdu plant and overseas expansion, 2) subcontracting fee for urgent orders, and 3) less government grants and FX gains. Despite higher expense, we are encouraged by improving GPM and breakthroughs in overseas markets (US/Japan +25%/13% YoY). Looking into 2H24E/2025, we are positive on Chengdu plant's UTR/yield ramp-up, high-end product growth and accelerated overseas strategy (Vietnam plant, Japan/Korea R&D center). We raised FY24-26E EPS by 2-9% to reflect 1H24 results and stronger overseas outlook. Our new TP of HK$10.48 is based on same 15x FY25E P/E. Trading at 7.7x/6.1x FY24/ 25E P/E, the stock is attractive in our view. Reiterate BUY.

1H24 strong revenue recovery dragged by higher expenses. BOEV reported strong revenue growth of 18% YoY in 1H24 (vs 0% in 2023), mainly driven by automotive high-end products, system products ramp-up and Chengdu's capacity expansion. By region, Chinese sales climbed 26% YoY (76% mix) thanks to favourable policy and new NEV model launches. For overseas, both revenue and ASP maintained double-digit YoY growth in 1H24. America/Japan sales grew 25%/13% YoY thanks to project wins and new offices in the US/Japan, while Europe/Korea declined 13%/10% YoY on soft demand. BOEVx posted GPM expansion of 2.3ppts YoY to 11.4% for the first time due to Chengdu plant in full operation with better yield.

2H24/2025 outlook: improving profitability, high-end/system products, overseas expansion and Vietnam plant ramp-up. Looking ahead, mgmt. is positive on overseas markets and opportunities in larger-display and multi-screen display and high-end products (Oxide/LTPs/OLED). Other key guidance includes: 1) overseas market with double-digit growth in FY24E, and target 50% of sales mix in FY27E (vs. 30% in 1H24); 2) system biz to grow 100%+ in 2024; 3) improving NPM in 2H24 vs 1H24 given operational efficiency and Chengdu's plant ramp-up; 4) Japan/Korea order wins to drive growth in 2025-26E; 5) Vietnam plant Phase I under construction, which will contribute to 10-20% additional sales after completion.

Revenue growth back on track; Reiterate BUY. We raised FY24-26E EPS by 2-9% to reflect 1H24 results, 2H profitability improvement and rapid overseas expansion. Our new TP of HK$10.48 is based on same 15x FY25E P/E. Trading at 7.7x/6.1x FY24/25E P/E (1-sd below hist. avg), the stock is attractive in our view.