Incident: The company released its 2024 semi-annual report. 2024H1 achieved revenue of 23.918 billion yuan, up 7.57% year on year; realized net profit of 0.824 billion yuan, up 87.89% year on year; realized net profit deducted from mother 0.81 billion yuan, up 119.27% year on year; achieved overall gross profit margin of 16.59%, up 1.99 Pct from the end of 2023, and 2.13 Pct from 2023H1.
Incident reviews:
The profitability of the consumer sector has increased markedly, and the proportion of self-supplied consumer batteries continues to rise.
2024H1, the company's consumer battery business achieved revenue of 13.201 billion yuan, a year-on-year decrease of 1.19%; achieved a gross profit margin of 18.07%, up 3.16 Pct from the end of 2023 and 4.14 Pct higher than 2023H1. The revenue scale continued to grow, and the gross margin level increased significantly. The company's consumer cell business sales and shipments increased significantly in the first half of the year. The self-supply ratio continued to increase, and the performance continued to grow. Furthermore, the market share of the company's consumer business has increased to a certain extent compared to last year, new breakthroughs have been made in developing new customers, and shipments of small cylindrical products have increased dramatically. In terms of production capacity layout, the company is gradually promoting the layout and expansion of domestic and foreign production capacity. Vietnam's consumer battery project has achieved mass production, and Vietnam's consumer battery project has begun construction. In the future, as the company continues to develop new products and technologies and the trend of cell+pack integration gradually becomes apparent, the company is expected to fully benefit from its advantages.
The company's power battery shipments have increased dramatically, and the research and development of new products and technologies has achieved remarkable results.
2024H1, the company shipped a total of 8.33 GWh of power batteries, with a year-on-year increase of 66.93%, achieving revenue of 6.201 billion yuan, an increase of 19.58% over 2023H1, and a gross profit margin of 11.66%.
In terms of new product development, the company released “flash charge” battery 3.0 series products for the BEV market. Currently, it has the capacity to mass-produce 5C battery products. 6C battery products are about to be mass-produced, and the development of the next generation of 6-8C flash batteries is progressing smoothly; for the EREV and PHEV markets, the company's layout covers 100-300+km of plug-in hybrid battery products; for the electric vehicle operation market, the company provides long-life low-cost lithium iron phosphate battery solutions, with a cycle life of more than 4000 times, and the fast charging time is less than 30 minutes, which is extremely expanding Broaden application scenarios and application boundaries to enhance customer experience. In addition, the company continues to develop advanced battery products such as solid-state batteries, lithium metal batteries, silicon anode high specific energy batteries, lithium manganese-iron phosphate batteries, and sodium-ion batteries. At present, first-generation semi-solid state batteries have been developed, second-generation semi-solid-state battery cells have begun pilot testing, and third-generation polymer composite all-solid-state batteries have completed laboratory verification. It is expected that product development will be completed in 2025, and fourth-generation all-solid-state batteries are still under development. It is expected that laboratory sample production will be completed in 2027.
Investment advice:
We raised our performance forecast. The company's net profit for 2024-2026 is 1.781/2.194/2.349 billion yuan, respectively (the previous forecast value for 2024-2026 was 1.123/1.478/1.549 billion yuan), EPS was 0.96/1.18/1.26 yuan, respectively. The PE corresponding to the current stock price is 17.08/13.87/12.95 times, respectively. Considering that the company's consumer battery business is stable, the scale effect of the mobile storage business is gradually showing, so it maintains a “buy” rating.
Risk warning:
Risk of fluctuations in raw material prices; risk of product and technology updates; risk of downstream demand falling short of expectations; risk of increased market competition.