2024 上半年轻量化业务、空气悬架收入高增长，海外控费有成效。1H24国内收入同比增长33.8%，收入占比达51.4%。海外收入增幅较低，但我们预计费用管控成效有显著提升。1H24 国内业务毛利率27%，海外业务毛利率17%，国内业务毛利率同比下滑，主要由于空气悬架业务处于拓展期，毛利率同比下滑所致。轻量化业务同比增长157%，收入占比14.8%，盈利能力改善，在保持国内轻量化业务稳步发展的同时积极布局海外轻量化市场，目前在斯洛伐克及墨西哥的轻量化工厂正有序建设中。中鼎子公司四川望锦公司的球头铰链总成产品，是底盘系统核心安全部件及性能部件，拥有全球领先的技术，具备较高的技术门槛。热管理系统方面，中鼎正积极布局新能源汽车、新型储能、超算中心三大领域温控系统总成产品。Matters:
The company released its 2024 interim report, with total 1H24 operating income of 9.7 billion yuan (+18% YoY), net profit of 0.7 billion yuan (YoY +35%), net profit of 0.6 billion yuan (YoY +41%).
Ping An's point of view:
In the first half of 2024, quantitative business and air suspension revenue grew rapidly, and overseas fee control was effective. 1H24's domestic revenue increased 33.8% year on year, accounting for 51.4% of revenue. Overseas revenue growth is low, but we expect a significant improvement in the effectiveness of cost control. 1H24 domestic business gross profit margin was 27%, overseas business gross profit margin was 17%. Domestic business gross margin declined year-on-year, mainly due to the year-on-year decline in gross margin due to the expansion period of the air suspension business. The lightweight business increased 157% year on year, accounting for 14.8% of revenue, and improved profitability. While maintaining the steady development of the domestic lightweight business, it is actively laying out the overseas lightweight market. Currently, lightweight chemical plants in Slovakia and Mexico are being built in an orderly manner. The ball hinge assembly product of Sichuan Wangjin Company, a subsidiary of Zhongding, is the core safety component and performance component of the chassis system. It has world-leading technology and a high technical threshold. In terms of thermal management systems, Zhongding is actively deploying temperature control system assembly products for the three major fields of new energy vehicles, new energy storage, and supercomputing centers.
Overseas business fee control has been effective, and domestic implementation strategies for overseas mergers and acquisitions have been actively promoted. Zhongding Co., Ltd. began overseas mergers and acquisitions in 2008. It has gone through several stages of global mergers and acquisitions, landing in China, and overseas regulation. Since 2020, Zhongding has built a global organizational structure system according to the five major divisions to strengthen the management of overseas enterprises. Currently, overseas fee control is effective. According to the company's financial reports, as of mid-2024, the three major regions of Asia, Europe, and America accounted for 61.3%/27.6%/11.1% of production, respectively.
The air suspension space is large, and the barriers for core components are high. According to the company's semi-annual report, the 1H24 air suspension business revenue was 0.57 billion yuan (+60% year over year). Up to now, the company's domestic air suspension business has received orders with a total output value of about 14.4 billion yuan, of which the total output value of assembly product orders is about 1.7 billion yuan. Its subsidiary, German AMK, is a high-end supplier of air suspension systems. AMK China's air supply unit product hardware localization rate is gradually increasing.
Relying on the Group's strengths in the rubber field, Dingyu Technology, a subsidiary of the company, focuses on the development and production of air springs. Recently, air springs and gas storage tank products have been targeted for projects. Self-produced air springs, air supply units and gas storage tank products have been assembled, laying the foundation for Zhongding Co., Ltd. to further expand the air suspension system assembly product market in the future. At the same time, the company is also speeding up the implementation speed of other hardware assembly products for air suspension systems (layout of magnetorheological shock absorber projects).
Dependence on a single customer is low, and 2024 business performance is relatively more stable. The company's semi-annual report revealed that the top ten customers of 1H24 accounted for 51% of total sales revenue for the same period. Zhongding Co., Ltd. was less dependent on a single customer, and the development of some OEMs and their strategic products fell short of expectations in 2024. The company's relatively scattered customer structure made the company's operating performance relatively better in the auto parts field. According to the company's financial reports, BYD/Ideal and Geely are the company's 2/4/9th largest customers respectively. The new energy business reached 3.34 billion yuan in sales in the first half of 2024, accounting for 36% of the automobile business revenue during the same period. Its sales in the new energy sector in China were 2.4 billion yuan, accounting for 49% of the domestic automobile business revenue during the same period.
Profit forecast and investment advice: While maintaining the steady growth of traditional business, the company continues to promote the implementation and growth of the incremental business of air suspension systems, lightweight chassis systems, and thermal management systems. The air suspension sector has a high entry barrier. Zhongding Co., Ltd. now has a large share in the air supply unit. The air spring business has broken through and maintained the company's performance forecast. The net profit to the mother for 2024/2025/2026 is expected to be 1.39 billion/1.65 billion/1.88 billion, maintaining the “recommended” rating for the company.
Risk warning: 1) The degree of overseas business recovery falls short of expectations; 2) the new business faces fierce competition, resulting in lower profitability than expected; 3) the output of major supporting customers falls short of expectations; 4) the penetration rate of air suspension systems falls short of expectations.