The company released 202 4H1 performance report:

Q2: Revenue of 3.72 billion yuan (+19.00%), net profit of 0.265 billion yuan (+58.65%); net profit of non-attributable net income of 0.266 billion yuan (+7.60%);

H1: Revenue 6.346 billion yuan (+13.87%), net profit attributable to mother 0.474 billion yuan (+44.02%); net profit not attributable to mother 0.465 billion yuan (+10.32%).

It is at the center of performance forecasting.

Revenue Analysis: Automotive Thermal Management Continues to Increase

Refrigeration accessories: We expect Q2 to be around 2.8 billion yuan, YOY +21%. Driven by factors such as delayed confirmation of Q1 orders and accelerated growth in the commercial refrigeration parts business;

Automotive thermal management: We expect Q2 to be around 0.2 billion yuan, YOY +116%. Accelerate the volume of core customers and continue to grow

Refrigeration equipment: We expect Q2 to be around 0.4 billion yuan, YOY +10%. We judged this to be an improvement over the decline in Q1 revenue.

Profit analysis: High base of non-operating expenses and improved cost efficiency drive profit

Gross profit margin: 18.3% in Q2, -0.7/+0.8pct month-on-month, which is expected to be affected by product restructuring, rising shipping costs and raw materials;

Net profit margin: Q2 net profit margin 7.1%, YoY +1.8/-0.8pct. Main reasons: 1) The divestment of the energy saving business in the same period last year resulted in large non-operating expenses; 2) Cost optimization: 24Q2 sales/management/R&D/finance expenses ratio 2.41%/2.93%/3.38%/-0.30%, compared to -0.7/-0.2/-0.1/-0.1pct. All four fees were optimized.

Investment advice:

Our point of view:

The company is the core component target of the air conditioning industry chain, and commercial air conditioning components may continue to benefit from domestic replacement; the auto zero growth logic continues to be verified, and the acquisition of Shanghai Dachuang has enabled the expansion of the NEV thermal management business, which is expected to continue to contribute to increased performance.

Profit forecast: We expect the company's revenue in 2024-2026 to be 12.532/13.782/15.06 billion yuan, +10.1%/+9.3% YoY, net profit to mother 1.047/1.174/1.367 billion yuan, +41.9%/+12.1%/+16.5% YoY; corresponding to PE 11/10/8X, maintaining a “buy” rating.

Risk warning:

Competition in the industry is intensifying, and raw material costs fluctuate.