Matters:

On August 29, 2024, the company released its 2024 semi-annual report: revenue of 0.448 billion yuan (YOY +25.44%), gross profit margin of 22.39% (YOY +2.00pct), net profit to mother 0.027 billion yuan (YOY +175.72%), deducted non-net profit of 0.026 billion yuan (YOY +326.46%) in the first half of 2024.

Single Q2 achieved revenue of 0.208 billion yuan (YOY +4.33%, QOQ -13.33%), net profit to mother 0.005 billion yuan (YOY -65.70%), after deducting non-net profit of 0.004 billion yuan (YOY -63.31%).

Commentary:

Overseas mold release was 24H1, and profits increased significantly. 24H1 achieved net profit of 0.027 billion yuan (YOY +175.72%), and 24H1's high performance was mainly due to overseas stamping mold business volume: the company continued to expand the North American and European markets and business, and the company's overall revenue maintained an increasing trend compared to the same period last year. Among them, 24H1 increased significantly compared to the same period last year as the company's automobile stamping mold business volume increased significantly compared to the same period last year (24H1 mold revenue 0.247 billion, up 124.33% year on year), and the gross profit margin of the stamping mold business Significantly higher than other businesses (24H1 mold business gross profit margin of 29.19%, while the company's overall gross profit margin was 22.39%), the high-margin mold business showed a high increase in 24H1 performance.

The stamping mold+stamping parts two-wheel drive company has entered the fast track of development. (1) Stamping dies are an indispensable key tool in vehicle manufacturing. In recent years, with the rapid penetration of new energy vehicles, the iteration of new models has accelerated, driving the continuous expansion of the market capacity of stamping dies. Among them, overseas car companies lag behind China in the electrification process, and subsequent development will accelerate, driving the overseas mold market to accelerate. In the field of automotive molds, the company cooperated deeply with overseas customers such as Magna, Lear, and Brose, while actively increasing production capacity in the US and Germany to meet rapidly growing overseas demand. In the context of the rapid development of the overseas mold industry and the expansion of the company's production capacity, the company's automotive mold business is expected to fully benefit from this overseas model cycle. (2) Stamping parts are widely used in automobiles, and the supporting value of bicycles can reach the level of 0.01 million yuan. Based on the calculation of 0.01 million yuan per bicycle, the global automotive stamping parts market space in 2022 is 816.3 billion yuan. The company has been deeply involved in the field of automotive stamping parts for more than ten years, and has manufacturing, R&D, product and customer advantages. Tesla is the world's leading NEV company, and the company's deep cooperation with Tesla is expected to follow the rapid development of customers. The company announced in December 2023 that the fixed increase has been successfully completed. With the implementation of the additional 35 million sets of stamping parts production capacity, the company's stamping parts are expected to enter a period of rapid growth.

Profit forecasting and investment advice. After more than ten years of intensive cultivation, the company has formed two major segments: stamping dies and stamping parts. Stamping molds benefit from overseas model cycles, and stamping parts are bound by major customers to actively expand production. We forecast that the company will achieve net profit of 0.101/0.151/0.206 billion yuan in 2024-2026. Refer to the valuations of comparable companies such as Ruihu Mold, Tuopu Group, and Xinquan Co., Ltd., and considering the high growth of the company's mold & stamping parts business, the company was given an 18 times PE valuation in 25 years, corresponding to a target price of 15.48 yuan, maintaining a “strong push” rating.

Risk warning: Downstream demand falls short of expectations, production expansion falls short of expectations, competitive landscape intensifies, dependence on a single major customer is high, and the gross margin of the mold business falls short of expectations.