occurrences

In the first half of 2024, the company achieved operating income of 8.66 billion yuan, +5.4% year on year; realized net profit of 0.222 billion yuan, +9.5% year over year; net profit after deducting non-return to mother 0.2 billion yuan, +16.55% year on year. Among them, 24Q2 revenue was 4.456 billion yuan, +5.96% YoY; net profit to mother was 0.102 billion yuan, +8.1% YoY.

The rail transit business grew at a high rate in Q2. Wind Power Blade focused on the peak Q3 season, and the 24H1 rail transit sector achieved sales revenue of 1.15 billion yuan, yoy +24%, of which Q2 achieved sales revenue of 0.68 billion yuan, yoy +40%; overseas market revenue reached a record high, up 19% over the same period last year, and the global rail vehicle damping market share increased to 30%. With the increase in the company's investment in overseas rail transit markets, overseas markets are expected to show a continuous growth trend, with domestic market orders increasing by more than 20% year on year, of which The maintenance market business grew significantly.

24H1 Industrial and Engineering Division's sales revenue was 0.9 billion yuan, yoy -3.3%, of which Q2 achieved sales revenue of 0.39 billion yuan and yoy -13.6%. In addition to the traditional line wind power business, 24H1 has expanded into new markets, including the ship market, successful application of shock absorbers, steady progress and prototype development of marine couplings, deepening cooperation with CRRC Zhuzhou in the field of hydrogen production, and continuous preparation for future continuous development.

The 24H1 wind power sector had sales revenue of 2.8 billion yuan, yoy -0.5%, of which Q2 achieved sales revenue of 1.48 billion yuan, yoy +4.4%. 24H1 received a batch order for offshore blades from Goldwind Technology, cooperated closely with key overseas customers, and became its preferred domestic supplier for 3MW wind power blades.

Automobile revenue reached a record high, and Bogo's business situation changed

The automotive sector achieved sales revenue of 3.65 billion yuan in the first half of the year, +10.4% year-on-year, and net profit of 24.72 million yuan, reversing losses for two consecutive quarters. The company continues to promote regional restructuring in Germany. The main work of the Wuxi Phase II base project has basically been completed. It is expected to be put into operation in the third quarter of this year, further increasing the scale of business in the Asia-Pacific region.

The company's new materials and other markets generated a total sales revenue of 0.15 billion yuan. High-end polyurethane damping products, high-end polyurethane protective products, PACK functional packaging and structural packaging products developed by the company's New Materials Division have made major breakthroughs in market development, technology development, and production capacity construction. In terms of capacity building, the construction of the new materials industry base is progressing according to the plan. After production is put into operation, it will form a scale advantage and enhance the comprehensive competitive strength of the new materials sector.

Investment advice: The company is a subsidiary of CRRC in China. It has sufficient momentum to improve quality and reduce capital costs under equity incentives, and all major businesses are expected to resonate. We expect the company's net profit to be 0.65/0.94/1.13 billion yuan in 24-26, respectively, maintaining a “buy” rating.

Risk warning: wind power installations fall short of expectations, risk of fluctuating raw material prices, risk of international operation and management, risk of industry competition, supply chain risk