Key investment points: The company released its 2024 semi-annual report. In the first half of 2024, it achieved operating income of 2.742 billion yuan, +39.8% year over year; realized net profit of 0.372 billion yuan to mother, +34.9% year on year. The company achieved revenue of 1.325 billion yuan in 24Q2, +26.4%/-6.5% YoY; realized net profit to mother 0.153 billion yuan, +6.1%/-30.4% YoY. Q2 Results were slightly lower than expected.

Benefiting from new energy customers, the energy sector business achieved significant growth. In the first half of '24, the company's revenue was 2.742 billion yuan, +39.8%; by business, lighting control revenue was 1.38 billion yuan, +36%; motor control systems were 0.44 billion yuan, +21.1% year over year; energy management system revenue was 0.32 billion yuan, +103.8% year over year; vehicle electronics and electrical revenue was 0.42 billion yuan, +27.5% year over year. Looking at a single quarter, Q2 achieved revenue of 1.325 billion yuan, +26.4%/-6.5%; net profit to mother of 0.153 billion yuan, +6.1%/-30.4% month-on-month, with a significant month-on-month decline in net profit mainly due to factors such as gross margin Q2 of 26.12% and -5.85pct month-on-month. Due to factors such as confirmation of price cuts by some customers in the second quarter and delays in chip compensation, it is predicted that the third quarter will improve; however, there was a positive contribution on the cost side. Q2's four-rate rate rate was 14.8%, YoY- 1.7pct/month-on-month; final Q2 net profit margin 11.5%, year-on-month -2.22pct, -3.95pct.

As a core supplier of automotive electronics, the company continues to expand in terms of new products and customer structure optimization. 1) Targets continue to increase: In the first half of the year, the company received 43 new designated projects from customers such as Volkswagen Global, BMW, Mercedes-Benz, Audi, North American Auto Builder, and Xiaopeng, and the estimated product life cycle sales volume is about 75 million; the cumulative product life cycle of the research project exceeds 0.28 billion controllers, which is only a further increase compared to 0.25 billion at the end of 23. 2) Smooth development of new products: The company focuses on new products and new technology research and development. New products such as body domain controllers, chassis domain controllers, chassis suspension controllers, Efuse, and cockpit data power supplies are gradually entering the domestic and foreign customer support system. Once platform sales for overseas global car companies are achieved, the growth ceiling is further opened. 3) Increase in the proportion of new car builders: The company has actively developed new power businesses in recent years. In the first half of the year, new power customers accounted for more than 15% of sales. Among them, Ideal became the company's 4th largest customer, with sales of about 0.3 billion yuan, +157.5% year over year, accounting for 11% of sales, and +5.1 pct year over year, contributing to growth momentum. The ideal rapid growth mainly increases bicycle ASP through the expansion of new products to drive revenue elasticity.

Keboda Intelligent Technology is expected to enter mass production in the second half of the year. Keboda Intelligent Technology mainly provides high-level autonomous driving solutions such as intelligent driving domain controllers. It was established in 2022. The listed company invested 20% in order to follow the trend of intelligence and horizontally expand more high-end intelligent driving-type domain controllers. Keboda Intelligent Technology 2024H1 achieved revenue of 7.892 million yuan, mainly R&D revenue; with more than a year of R&D investment, it is expected to enter the batch stage in the second half of the year, and at that time it will become a comprehensive supplier with intelligent domain, vehicle body area, and chassis domain.

Investment analysis: As an excellent automotive electronics company, globalization has begun and the purchase rating is maintained. Considering that the second-quarter results fell slightly short of expectations, the 24-25 revenue forecast was slightly revised to 6/7.72 billion (the original forecast was 6.12/7.82 billion) and the 26-year forecast was 9.72 billion yuan (original forecast 9.53 billion); at the same time, the 24-25 net profit to mother was 0.83/1.11 billion yuan (the original forecast was 0.868/1.112 billion yuan), and the 26-year profit was revised to 1.389 billion yuan ( (The original forecast was 1.358 billion). Corresponding to 24-26 PE was 21/16/13 times. Considering that the company has a global & intelligent dual strategic model, there is great room for growth, and the purchase rating is maintained.

Core risks: downstream automobile sales fall short of expectations, the company's production capacity investment falls short of expectations, and the development of the robotics industry falls short of expectations.