The company released its 2024 semi-annual report, and revenue and net profit to mother grew steadily. In the first half of the year, there was good progress in fields such as automotive electronics and smart consumption. Smart robots and new motors became important new business directions. Maintain an increase in holdings rating.

Key points to support ratings

2024H1 revenue grew steadily, and net profit to mother declined slightly in Q2. The company's revenue for the first half of 2024 was 0.645 billion yuan, +28.10%; net profit to mother was 0.094 billion yuan, +29.05%; net profit after deducting non-return to mother was 0.072 billion yuan, +49.89% year on year; gross profit margin was 31.23%, +3.19pcts year on year; net profit margin was 14.54%, year on year +0.10pct. Q2 2024 single quarter revenue 0.333 billion yuan, +18.20%, +6.52% month on month; net profit to mother 0.038 billion yuan, -13.51% year on year, -30.55% month on month; net profit without return to mother 0.028 billion yuan, -7.30% year on year, -35.85% month on month; gross profit margin 29.72%, +0.95pcts, month-on-month; net profit margin 11.56%, year-on-year -4.23pcts, month-on-month -6.17pcts.

The 2024H1 automotive electronics business accounts for more than half of the revenue, and all major business areas are making good progress. In the first half of 2024, the company's revenue in the automotive electronics sector was 0.34 billion yuan, accounting for 52.65% of revenue; revenue in the smart consumer sector was 0.153 billion yuan, accounting for 23.71% of revenue; revenue in the communications sector was 0.087 billion yuan, accounting for 13.52% of revenue; revenue in the medical and personal care sector was 0.015 billion yuan, accounting for 2.40% of revenue; revenue in other fields was 0.05 billion yuan, accounting for 7.71% of revenue.

In terms of automotive electronics, the company used a “DC motor+parallel drive+worm gear” transmission structure to launch solutions for automobile ceiling screens, offset screens and rotating screens, which solved the problems of small space, low noise and high reliability requirements for human-computer interaction products. The company completed solution design and development of innovative products such as automobile spoiler, precision solenoid valve core valve stem filters, etc., and some products have entered the mass production stage; in the field of industrial automation, the company's valve actuators are successfully tested; in the field of industrial automation, the company's valve actuators are in the active market In the promotion phase, roller motors have successfully entered the market.

Smart robots and new motors were the new highlights of the business in the first half of the year. In terms of dexterous hands, the company's bionic robot dexterous hands integrate structure, software and hardware systems. They can be used in conjunction with various flexible robots. They have the characteristics of multiple degrees of freedom and high power density, and can complete complex and dexterous gripping movements. In terms of motors, the company completed the development of high-torque DC motors, brushless motors, and miniature brushless hollow cup motors in the first half of 2024. Among them, high-torque DC motors and brushless hollow cup motors have formed a series of products that have been successfully used in the fields of automobiles, medicine, humanoid robots, etc., and are currently developing 4 mm diameter brushless hollow cup motors; 8 mm permanent magnet stepper motors have achieved automated mass production, and are also actively deploying 3.4 mm and 4.4 mm more challenging products.

valuations

As the company's 2024Q2 net interest rate showed a month-on-month decline, or had a negative impact on full-year results, we lowered the company's profit forecast. We expect the company to achieve earnings of 0.90 yuan/1.10 yuan/1.43 yuan per share in 2024-2026, corresponding to a price-earnings ratio of 39.8 times/32.6 times/25.1 times. The company's dexterity and motor layout have many highlights, and it maintains an increase in holdings rating.

The main risks faced by ratings

Risk of fluctuations in raw material prices; technology research and development falling short of expectations; downstream demand falling short of expectations.