According to Ingol's 2024 annual report, 24H1's revenue was 1.023 billion yuan, +42.1% year over year; the mother was 34.715 million, +218.5% year over year. 24Q2's main revenue was 0.55 billion, +18.8% YoY; net profit to mother was 26.2509 million yuan, +222.3% YoY. Revenue and profit were generally in line with expectations.

Overall revenue was in line with expectations, and the power supply business growth exceeded expectations. The 24H1 power assembly achieved revenue of 0.501 billion yuan, and the growth exceeded market expectations. The power supply assembly shipped 0.3775 million units, ranking first among domestic third parties. Power assemblies are currently available on A00 to B-class models. In the future, as the share of B/C-class product deliveries increases, overall profitability will improve. The electric drive assembly achieved revenue of 0.24 billion yuan, and the motor controller achieved revenue of 0.235 billion yuan, which is basically in line with expectations. The company's top five customers contributed nearly 70% of revenue in the first half of 2024, mainly including SAIC, Geely, Dongfeng, Cyrus, Great Wall, Changan and other customers.

Management improved, R&D accelerated, but the price war suppressed gross margin repair, and overall operating pressure eased slightly. 24H1's sales/management/R&D expense rates were 2.0/3.8/ 9.0% respectively, down -0.7/-1.5pct year-on-year, which was one of the important factors in improving performance in the first half of the year. However, gross margin was impressed by pressure such as product structure and annual decline in customers. 24H1 was only 14%, down about 3 pcts from the previous year, mainly due to the drag on the NEV business.

Convertible bonds will further enhance the company's product quality and customer structure, thereby improving profits. The company's convertible bond raising project will increase investment in high-precision automated production lines, which is of great significance for the company to improve product consistency and further obtain support for B-class and C-class models with relatively high added value. It can not only provide customers with better products and services, but also enhance the company's overall profitability.

The addition of targets will help the company to steadily increase sales in 24H2 and '25. The company 24H1 has cooperated with Dongfeng Nissan, Guangzhou Automobile Honda, Vinfast, Changan Qingshan, CRRC Era, etc.; in the commercial vehicle sector, the company completed mass production and delivery of power system products for BAIC Foton commercial vehicles and Geely remote commercial vehicles; in the field of non-road vehicles, it has also been recognized by international customers such as Germany's Linde Forklifts, France's Manitou, and Korea's Doosan Group. The company's products have advantages such as miniaturization, lightweighting, and integration. With the advent of the electrification era in agricultural machinery, exploration, ships, low-altitude aircraft and other industries, the application fields of the company's drive systems and power system products will further expand.

Investment analysis: Technology cost reduction and standardized products are still the company's main development direction, and providing customers with cost-effective mature third-party products is the development purpose it has always insisted on. However, considering the pressure of the price war and the pressure on management expenses during the company's transition period. The 24-26 revenue forecast was slightly lowered from 2.6/3.3/4.13 billion to 2.5/3.2/4.08 billion; the 24-26 net profit forecast was lowered from 0.1/0.22/0.29 billion to 0.09/0.16/0.21 billion, corresponding to current PE 39/22/17 times. Considering that the company is actively laying out various new tracks, it is seeking breakthroughs in hot fields such as the low-altitude economy. In addition, the benchmark company Huichuan Technology's 2025 valuation was 18 times, with a compound profit growth rate of 16.6% in 23-25, corresponding to PEG = 1.1; there is still room for growth in Ingol's 25 PEG = 0.6 during the same period, so it maintains the company's shareholding rating.

Risk warning: The price war continues to worsen, raw material costs fluctuate, and downstream demand for new energy sources shrinks.