occurrences

The company held the 2024 Strategy Seminar on September 6, 2024. At the conference, the company's management had in-depth discussions on overseas performance prospects and the third-curve digital energy sector business.

The company's North American Silver Wheel turned a loss into a profit in the first half of the year. The share of overseas revenue is expected to continue to increase in terms of overseas business development results. Through 15 years of deep accumulation in overseas investment and factory construction, the company has now gradually entered the performance realization period. In terms of overseas production capacity layout, the company has now built R&D sub-centers and production bases in the United States, Mexico, Sweden, Poland and other countries, and uses global supply capacity to meet customer needs through rational planning of production layouts on a global scale. In terms of overseas targeted acquisition, the company successively obtained multiple locations from well-known global automobile groups and manufacturers, including Mercedes-Benz and Volvo in the first half of 2023. The products cover cooling modules, air conditioning boxes, IGBT cold plates, chillers, battery liquid cooling plates, condensers, front-end modules, water-air coolers, etc. Thermal management components for new energy vehicles. In terms of overseas revenue, the company's share of export sales reached 22.4% at the end of 2023. By mid-2024, the share of export sales rose rapidly to 26.3%. According to the company's five-year overseas development plan, overseas territories are expected to account for more than 40% of revenue by 2028.

Every effort has been made to accelerate the development of the third curve business. It has broken through key customers and key projects. Currently, according to the technical and industrial development situation and needs, the company has sorted out and clarified the strategic products, strategic projects and strategic customers that the Digital and Energy Thermal Management Division needs to focus on, formulating the business goals of the division, and clarifying the key tasks that need to be paid attention to in order to achieve the goals. In terms of volume expectations for this year and next year, according to the company's plan, the company will mainly focus on the performance of business lines such as heat pumps, energy storage, wind and power generation this year. By 2025, business lines such as data centers and overcharging are expected to catch up and achieve simultaneous high growth in many fields. In terms of deepening and expanding strategic customer relationships, the company achieved remarkable achievements in the first half of 2024, and successfully established cooperative relationships with 4 strategic customers and 2 large customers. At present, the Digital and Energy Thermal Management Division's customer lineup has grown significantly, covering a series of world-renowned companies including major North American customers, Midea Group, BYD, CRRC, Sunshine Power, Ningde Times, Geely Automobile, GAC Group, and Envision Energy.

Investment advice and profit forecasting

We expect the company's revenue for 2024-2026 to be 132.69\ 158.77\ 18.93 billion yuan, and net profit to mother of 8.95\ 11.09\ 1.364 billion yuan, respectively. According to the latest current share capital estimates, the corresponding basic earnings per share will be 1.11\ 1.38\ 1.70 yuan, respectively. According to the latest stock price, corresponding to PE14.86\ 11.98\ 9.75 times PE. Maintain a “buy” rating.

Risk warning

The risk that the development of the automobile industry falls short of expectations, the risk that production schedules of leading new energy customers fall short of expectations, and the risk of fluctuating raw material prices.