Core ideas:
Benefiting from the recovery of the industry superimposed by strong overseas demand, the company's revenue and return net profit are all higher than the same period last year. According to the China report, 23H1 realized revenue of 2.04 billion yuan / year-on-year + 29.7% and net profit of 210 million yuan / year-on-year + 61.9%. Income and net profit increased rapidly compared with the same period last year. On the one hand, thanks to the recovery of the industry, the output of 23H1 truck industry was + 15.5% compared with the same period last year, including + 29% for heavy trucks and + 10% for light trucks; on the other hand, overseas demand was strong, and the company's export revenue reached 400 million yuan, + 39.5% compared with the same period last year. From a business point of view, the revenue of crankshaft / connecting rod / blank and casting / forging / air suspension business reached 12.8 billion yuan, respectively, which was + 37.2%, 39.1%, 33.0%, 29.2%, respectively.
The utilization rate of production capacity has increased and profitability has improved. According to the China report, 23H1 achieved a gross profit margin of 25.3%, year-on-year + 2.4pct, and home net profit rate of 10.4%, year-on-year + 2.1pct. From a business point of view, the business gross profit margin of crankshaft / connecting rod / blank and casting / forging / air suspension is 25.9%, 25.6%, 21.2%, 26.2%, respectively, compared with the same period last year + 2.0/+1.9/+1.5/+2.1pct.
Crankshaft & connecting rod main business benefits from industry recovery + internationalization, air suspension, electric steering and other new business to open up growth space. The company's main business of crankshaft and connecting rod will benefit from the recovery of the commercial vehicle industry and the improvement of competitiveness to the international direction. According to the China News, Tianrun Intelligence Control, the holding subsidiary of 2023H1's empty suspension business, has completed 20 projects, 18 new product designs, and 43 new product trial deliveries. In addition, in July 2023, the company issued an announcement and signed an agreement to contribute 60 million yuan in the form of monetary funds to jointly invest with Suzhou, Wandu, to set up Tian run Wandu, with a shareholding ratio of 60%. The joint venture will focus on the electric steering system of commercial vehicles.
Profit forecast and investment advice: the company is the domestic crankshaft-connecting rod leader, the main industry benefits from the industry recovery + internationalization, empty suspension, electric steering to open the growth space. It is estimated that the company's EPS for 23-24 years will be 0.36 yuan per share. With reference to the company's historical valuation and future growth space, the company will be given 25 times PE, corresponding to a fair value of 8.93 yuan per share, maintaining a "buy" rating.
Risk hint. The prosperity of the industry is not as good as expected; the empty development is not as expected; the competition in the industry is intensified.