Incident: Vmax released its 2024 semi-annual report. The company's 2024H1 revenue was 2.771 billion yuan, up 22.93% year on year; net profit to mother was 0.216 billion yuan, up 1.84% year on year; net profit after deducting non-return to mother was 0.197 billion yuan, up 2.83% year on year. The company's 2024Q2 revenue was 1.404 billion yuan, up 16.0% year on year, up 2.7% month on month; net profit to mother was 0.102 billion yuan, down 17.9% year on year and 11.1% month on month.

Third-party leader in the car charger industry: The company's 2024H1 vehicle power supply revenue was 2.298 billion yuan, an increase of 17.23% over the previous year. The increase was mainly due to SOP releases for several domestic car companies' designated projects. According to NE Times data, from January to June 2024, the company's market share of passenger car OBC shipments in China was 19.4%, ranking second; in the third-party supply market, the company's shipments accounted for about 32.42% of the market share in the first half of 2024.

The trend of integration is strengthening, and electric drive all-in-one assemblies are growing rapidly: the revenue of 24H1 electric drive systems was 0.285 billion yuan, an increase of 211.32% over the previous year. Under the development trend of increasing integration of new energy vehicle vehicle power supplies and electric drive systems, the company is actively expanding into the field of electric drive systems, and has obtained the fixed position of many well-known domestic and foreign companies such as SAIC Motor Group, Great Wall Motor, and Chery Automobile. Electric drive all-in-one assembly products achieved operating revenue of 0.206 billion yuan in 2024H1, an increase of 368.24% over the previous year.

24H1 gross margin increased significantly and net profit margin declined: the company's 2024H1 gross margin was 20.63%, up 1.69 pcts year on year, mainly due to product structure upgrade, cost reduction and efficiency; net profit margin was 7.96%, down 1.21pcts year on year, mainly due to the company's increased R&D investment. The company's 24H1 R&D expenses were 0.179 billion yuan, up 62.43% year on year, and the R&D cost ratio was 6.45%, up 1.57 pcts year on year.

Overseas customers continue to break through, and are expected to expand: the company's 24H1 overseas revenue was 0.268 billion yuan, down 16.49% year on year, mainly due to orders from overseas customers being delivered domestically, and overseas business is growing. The company mass-produces and sells integrated automotive power products to Stellantis, and has obtained targets from overseas car companies such as Renault, Aston Martin, and Ferrari.

800V vehicle power supply technology is leading, liquid cooling modules have achieved mass production: The company's 800V vehicle integrated power supply products have been selected by customers such as Xiaopeng Motors, a new car builder, Rantu Auto, and Zhiji Auto. Among them, the Xiaopeng G9 was launched in 22Q3. The Xiaopeng X9 model, the MPV model of a new leading car builder, as well as the Zhiji LS6 and remodeled LS7 models have all been mass-produced and shipped. In addition, the company's 40kW liquid-cooled charging pile module products have been mass-produced and shipped.

Profit forecast, valuation and rating: Considering increased competition in the OBC industry, the net profit forecast for 24-26 was lowered to 0.533/0.706/0.897 billion yuan (down 20%/21%/18%), corresponding to PE 15/11/9X. As a third-party automotive power supply leader, the company's magnetically integrated, 800V products have technical differentiation. Electric drive all-in-one products open up a second curve in overseas markets, showing economies of scale and maintaining a “buy” rating.

Risk warning: DC charging technology replacement risk, downstream demand falls short of expectations.