Business income increased by 44% over the same period last year, and the motor electronic control business developed at a high speed. The company achieved 1.423 billion yuan in revenue in the first half of 2022, an increase of 44% over the same period last year. Among them, the revenue of intelligent equipment business / new energy automobile motor electronically controlled parts business was 506 million yuan respectively, an increase of 13% and 186% respectively over the same period last year. The net profit returned to the mother was 63 million yuan, down 32% from the same period last year, while the non-net profit was 31 million yuan, down 61% from the same period last year. In the second quarter alone, the company achieved operating income of 874 million yuan, an increase of 32% over the same period last year, an increase of 59% over the same period last year, and a net profit of 26 million yuan from the same period last year, down 54% from the same period last year and 28% from the previous year. The rapid growth of electric drive business of new energy vehicles has promoted the improvement of the overall revenue level. Due to the long delivery cycle, smart equipment business has a certain impact on the recognition of project revenue.

The gross profit margin is under short-term pressure and the expense rate is strictly controlled. In the first half of 2022, the company's gross profit margin / net profit margin was 17.67% / 4.40%, respectively, down 8.21% / 4.95% compared with the same period last year; the sales / management / finance / R & D expense rate was 2.72% / 4.92% / 0.86% / 7.39%, respectively, and 0.54% / 0.43%, 0.87% and 0.30% respectively compared with the same period last year. In the second quarter, the company's gross profit margin / net profit margin was 16.26% / 3.02% respectively, down 5.62% from the same period last year and 3.65% from the previous quarter. The sales / management / finance / R & D expense rates were 2.28%, 4.16%, 1.15%, 7.41%, respectively, 0.08% lower than the same period last year, 0.61% 0.96% 1.18%, 1.13% 1.97%, 0.74%, 0.05%, respectively. The epidemic in the second quarter repeatedly increased the cost of project implementation, superimposed the rise in raw material prices, and had a negative impact on short-term gross profit margin. The company has strict control over the cost input, and the expense rate has decreased except for R & D.

Benefiting from the high-profile demeanor of new energy vehicles, it has entered the industrial chain of new forces in car building. In the first half of 2022, new orders for the company's intelligent equipment business totaled 2.2 billion yuan, an increase of 67 percent over the same period last year, while existing orders totaled 5.6 billion yuan, an increase of 69 percent over the same period last year. The company delivered 100700 sets of motor electronic control (including Daoyi Power), an increase of 162% over the same period last year.

The overall solution of the company's intelligent equipment mainly includes automobile body-in-white intelligent connection production line, automobile powertrain intelligent assembly and testing production line, power battery intelligent assembly and testing production line, etc., the main customers are Tesla, Inc., NIO Inc., Ningde era and so on. The electric drive system of new energy vehicle is the core component of new energy vehicle. The company has a complete product development and production system of new energy electric drive system, including motor, electronic control and integrated electric drive system. The main customers are Dongfeng Honda, Guangzhou Automobile Honda, Jianghuai Automobile and so on. The coordinated development of the two major businesses benefits from the magnificent demeanor of the new energy vehicle industry.

Risk hint: sales of new energy vehicles are lower than expected, and raw material costs have risen sharply.

Investment advice: downgrade profit forecast and maintain "overweight" rating.

Taking into account the recurrent epidemic and the increase in project implementation costs, we downgrade our profit forecast. It is estimated that the company's homing net profit in 2022Universe 2023 will be RMB 1.69 million (originally RMB 2.32), corresponding to the PE of RMB 319 million in 50-25-18, and maintaining the "overweight" rating.