On August 28, the Science and Technology Innovation Board Daily (Reporter Yu Jiaxin) reported that on the evening of August 27, Weirun released its 2024 semi-annual report.

In the first half of this year, Weirun's revenue was 2.027 billion yuan, a year-on-year increase of 19.43%; net loss was 0.333 billion yuan, compared to a net loss of 89.0544 million yuan in the same period last year.

Looking at a single quarter, Weirun's net loss in the second quarter was 0.142 billion yuan, an increase of 9029.24% year-on-year and a 26.08% decrease quarter-on-quarter.

The company attributed the main reason for the decline in performance to the increase in research and development expenses and the decrease in gross margin during the reporting period.

Weirun's main business revolves around electronic systems, providing electronic products, research services, and high-level intelligent driving solutions for customers in the automotive, autonomous transportation, and other fields. The company has developed electronic products covering six major categories including intelligent driving, connected systems, cabins, and power.

The Science and Technology Innovation Board Daily noted that since 2023, the company has been continuously expanding its R&D team and significantly increasing research and development investment. In the first half of this year, the total research and development investment of the company amounted to 0.634 billion yuan, a year-on-year increase of 36.03%. It is worth noting that R&D expenses accounted for a large portion, with 0.537 billion yuan allocated to expense-based R&D investment.

The company's capitalized research and development investment was 96.6035 million yuan, an increase of 138.39% compared to the same period last year.

As of the first half of the year, the total number of employees at Jingwei Hengrun was 6,450, of which 5,101 were R&D and technical personnel, accounting for 79.09% of the total number of employees.

Among them, the number of R&D personnel in the first half of the year was 3,344, compared to 2,452 in the same period last year. The average salary of R&D personnel increased from 0.1823 million yuan to 0.1949 million yuan.

The net cash flow generated from operating activities in the first half of the year at Jingwei Hengrun was -0.727 billion yuan. The company attributed this mainly to the increase in loans paid to suppliers, as well as the increase in salaries and related expenses paid to employees.

Meanwhile, the sales expenses and management expenses of the company in the first half of the year were 0.161 billion yuan and 180 million yuan, respectively, both showing an increase compared to the same period last year.

"If the company is unable to successfully convert higher R&D investment into R&D achievements and meet market demands, its profitability will be adversely affected." The company admits that it faces the risk of significant decline in performance or losses.

Jingwei Hengrun is currently expanding its smart driving business. The company stated that its intelligent driving electronic products revolve around the evolving route of intelligent driving technology, with products covering intelligent sensors, integrated controllers for parking and driving, and high-level intelligent driving products.

In terms of ongoing projects, Jingwei Hengrun's "Advanced Driver Assistance System Development Project" has accumulated an investment amount of 0.398 billion, mainly applied scenarios are L2+ highways and L2-level urban road assistance driving.

For the L3 highway and L2+ urban road assisted driving scenarios, the "Ji Wei Heng Run" intelligent driving domain controller development project has accumulated a total investment of 0.16 billion yuan.

According to the investor relations activity record disclosed by Ji Wei Heng Run on May 24th, the company currently has a mass production project for high-speed NOA customers. Based on the Hee'xi high-power chip, the high-level intelligent driving domain control product that can achieve urban NOA function is expected to enter mass production and delivery status next year.

In response to this, industry insiders have expressed that the current competition in the high-level intelligent driving product market among various manufacturers is fierce, and the timing of Ji Wei Heng Run's mass production and delivery next year, as well as the competitiveness of its products, still need further examination.

Ji Wei Heng Run has previously announced that some of the company's relevant products and technical reserves can be applied to the field of self-driving cars, but there is still a great deal of uncertainty in the development of related businesses. Investors are advised to pay attention to investment risks.

It is worth noting that the revenue from Ji Wei Heng Run's top five customers accounts for about 50% of the current operating revenue, indicating a high level of customer concentration.

Under normal circumstances, during the lifecycle of a vehicle, the vehicle manufacturer will choose a relatively stable automotive electronics manufacturer to provide supporting production for the same component. If the company's major customers undergo strategic direction or layout adjustments, fluctuations in operating performance, or a large transfer of orders in the future, it will have a negative impact on the company's performance. The company acknowledges this.