Incident: The company released its 2024 semi-annual report. 2024H1 achieved operating income of 3.184 billion yuan, a year-on-year increase of 21.68%, achieved net profit of 0.148 billion yuan, a year-on-year decrease of 19.40%, and H1 realized net profit of 0.119 billion yuan, a year-on-year decrease of 18.62%; of these, Q2 achieved operating income of 1.701 billion yuan, an increase of 18.97% year-on-year, and achieved net profit of 0.08 billion yuan. With a decrease of 11.40%, Q2 realized net profit without return to mother of 0.053 billion yuan, a year-on-year decrease of 28.89%.

Gross margin declined year-on-year, and management and R&D expenses increased: 2024H1's gross profit margin was 27.12%, -0.66pct; 2024H1 sales expense ratio was 3.70%, -0.35pct; management expense ratio was 7.02%, +0.47pct; R&D expense ratio was 8.52%, +1.05pct year on year. Among them, the increase in management and R&D expense rates is mainly due to the year-on-year increase in employee equity incentive expenses, the company's increase in R&D investment, and the increase in equity incentive expenses.

Deeply involved in intelligence+lightweighting, the global layout and energy development: 1) The company's hydroformed structural parts and aluminum parts face the demand of the lightweight automobile market, and the automobile lightweight market continues to develop rapidly, and the company's hydroformed structural parts and aluminum parts will continue to benefit from it. As the degree of automotive electronics continues to increase, the company's vehicle sensing sensors, including pressure sensors, optical sensors, speed, position sensors, and acceleration/yaw rate sensors, have ushered in a period of rapid development. In response to the demand for automobile electrification, the company's air suspension systems are currently mainly concentrated in the middle and high-end NEV market, and has also deployed NEV exclusive products such as BUSBAR, liquid cooling plates, and current sensors. 2) The company has multiple production parks, R&D and sales centers in China, North America and Europe, and its products are sold directly to more than 50 countries and regions, laying the foundation for more of the company's product lines to gain a leading position in the global market share. In 2024, the Hungarian production park will accelerate the construction of new production capacity and further expand the scale and global layout of the sensor and air suspension business.

Investment advice: We forecast that the company will achieve net profit of 0.412/0.612/0.764 billion yuan in 2024-2026.

The corresponding PE was 16.55/11.14/8.92 times, respectively, maintaining the “gain” rating.

Risk warning: industry competition intensifies; customer development falls short of expectations; macroeconomic downside risks.