Incident: 24H1's total revenue was 1.17 billion yuan, -1.2% YoY; net profit to mother was 0.13 billion yuan, +2161.9% YoY. The company's gross profit reached 0.33 billion yuan, +17.4% year over year; gross profit margin was 28.3%, up 4.5 percentage points year on year.
Focus on the NEV industry and lay out the lithium battery business on multiple lines. The company was founded in 2007 and entered the Science and Technology Innovation Board in 2020. The company currently operates mainly in the business of power battery structural parts and NEV equipment. In addition, it is also involved in emerging fields related to the NEV industry, such as automatic charging robots and data elements. Recently, the company announced cooperation with Qingtao Energy to develop solid state battery core key equipment.
The share of overseas orders increased, and the company's performance took advantage of the momentum. The gross profit margin of the company's main business of intelligent automation equipment for new energy vehicles in the first half of 2024 was 33.6%, which is about 10 percentage points higher than in 23. Before 2023, the main downstream customers of this business were the Ningde Era. Currently, about 70% of the orders in hand come from overseas markets. Among overseas orders, the European market accounts for the main share. Delivery of these high-margin orders will cause the company's gross margin to rise rapidly. Foreign revenue reached 76.729 million yuan in 2023, roughly the same as the previous year, accounting for about 3%. 2024H1's overseas revenue reached 0.378 billion yuan, a significant increase, and its share soared to 32% of revenue.
The sales volume of overseas NEV companies continues to grow, and the company's business prospects are promising. The overseas NEV market started later than in China, and is expected to explode in the next two years as overseas car companies continue to launch new models. In the context of strengthened localization policies in Europe and the US and rising overseas demand, overseas OEMs and Chinese lithium battery companies are speeding up the construction of overseas factories. The company is one of the few Chinese companies that provide complete pack module equipment to overseas customers. The company's cooperative brands gradually became dominated by trams, and demand for production lines increased.
At present, multiple production lines have been launched. Skoda's first battery pack assembly line was launched in '19, and Volkswagen's Pack production line was successfully delivered in the first half of this year. The company's multiple production line performance has gained a first-mover advantage in the field of overseas pack equipment. Considering the prudence of overseas customers in upstream supply chain choices, the company has a strong competitive advantage in the overseas pack equipment market.
Profit forecasting and investment advice. The company's revenue for 2024-2026 is estimated to be 3/3.93/4.66 billion yuan, net profit to mother is 0.281/0.431/0.547 billion yuan, and EPS is 2.25 yuan, 3.45 yuan, and 4.37 yuan respectively. The corresponding dynamic PE is 15 times, 10 times, and 8 times, respectively. The growth rate of the company's overseas orders is growing rapidly, and the business has begun to gradually expand. The compound net profit growth rate for 25-26 is expected to be 40%. At the same time, considering that the company cooperated with Qingtao to develop core equipment for solid-state lithium batteries, it is expected that the lithium battery equipment market will be further opened up in the future, and 20 times PE will be given in 2024, with a target price of 45 yuan. For the first time, coverage will be given a “buy” rating.
Risk warning: Risk of overseas NEV development falling short of expectations; risk of increased industry competition and falling gross margin of structural components; risk of exchange rate fluctuations.