Incident: The company released its 2024 semi-annual report. Revenue for the first half of the year was 6.152 billion yuan, +16.90% year over year; net profit to mother was 0.403 billion yuan, +41.13% year over year; after deducting non-net profit of 0.364 billion yuan, +40.78% year over year. Among them, Q2 achieved revenue of 3.182 billion yuan in a single quarter, +17.55% year over month, +7.17% month on month; net profit to mother 0.211 billion yuan, +33.34% year on month, +10.37% month on month; after deducting non-net profit of 0.185 billion yuan, +24.77% year on year and +3.31% month on month.

Profitability continues to increase. 24H1's gross profit margin was 21.23%, +0.7 pct year on year, net profit margin 7.21%, and +1.1 pct year on year. Profitability continued to increase. Q2 The gross profit margin for the single quarter was 20.92%, +0.0/-0.6pct, the net profit margin was 7.32%, and +0.5/+0.2pct, respectively. The company's rate for the first half of the year was 13.05%, +0.2pct year on year. Among them, sales/management/R&D/finance rates were 2.6%/5.3%/4.6%/-0.6%, respectively, and +0.5/-0.1/-0.3 pct, respectively. More than 130 new projects have been acquired. It is predicted that after delivery, the newly acquired projects will increase the company's annual sales revenue by about 4.143 billion yuan during the life cycle, of which international orders account for 46.02% and domestic orders account for 53.98%.

Passenger vehicle orders account for 63.16%, digital energy orders for 14.10%, and commercial vehicles and non-road orders for 22.74%.

Overseas operations have been drastically improved, creating an international tier 1 for thermal management. During the reporting period, North American operations achieved operating income of 0.706 billion yuan, a year-on-year increase of 50.67%; achieved net profit of 7.8533 million yuan, turning a year-on-year loss into a profit; and a gross profit margin of 21.94%, +4.24pct year-on-year. European operators achieved operating income of 0.086 billion yuan, a year-on-year increase of 90.70%, and achieved net profit of 7.4117 million yuan. Compared with the same period last year, losses decreased significantly. Thanks to the company's “localized manufacturing, global operation” business model, the acquisition of orders from international customers accelerated during the reporting period. Passenger cars and commercial vehicles successively received projects from many internationally renowned automobile and parts manufacturers, and secured important projects from international customers in the digital and energy fields.

Accelerate the development of the third curve business and contribute to the long-term growth of the company's performance. The company is committed to expanding thermal management business in emerging fields such as intelligent driving, communication base stations, data processing centers, and photovoltaic energy storage, providing a broad space for long-term sustainable growth of the company's business. During the reporting period, the revenue of the digital and energy thermal management business increased by 23.50% year-on-year, accounting for an increase of 5.87% to 7.08% of the company's revenue. It has broken through 4 strategic customers and 2 major customers, and gradually established project development partnerships with many well-known domestic and foreign technology companies in the data center field.

Investment advice: The company has built an international tier 1 for thermal management, local manufacturing, global operation, data center and BTB computing power thermal management, and is ushering in an AI moment leading in thermal management. Revenue for 2024-2026 is estimated to be 13.2/15.8/18.2 billion yuan, net profit to mother is 0.858/1.196/1.465 billion yuan, EPS is 0.98/1.36/1.67 yuan, respectively, and corresponding PE is 15.40/11.03/9.01 times, respectively, maintaining the “buy” rating.

Risk warning: Increased prices of raw materials and shipping costs, trade tariffs, introduction of new products and new customers falling short of expectations, and automobile sales falling short of expectations.