Event: The company released its 2024 semi-annual report. Achieved operating income of 1.842 billion yuan, an increase of 27.22% year on year; realized net profit of 0.387 billion yuan, an increase of 104.51% year on year; realized net profit of 0.289 billion yuan after deduction, an increase of 52.59% year on year.

The digital maintenance business grew steadily, and the digital energy business achieved a breakthrough. 2024H1's digital maintenance business achieved revenue of 1.438 billion yuan, an increase of 18.04% over the previous year. With the continuous rise in the level of automobile intelligence and the significant increase in the safety awareness of car owners, the company's TPMS series products and ADAS intelligent inspection and calibration products have huge market potential, which is expected to bring continuous growth impetus to the company's digital maintenance business. The 2024H1 digital energy business achieved revenue of 0.378 billion yuan, an increase of 92.37% year over year. The company provides intelligent charging network solutions combined with the cloud. Among them, charging pile hardware is easy to expand and can meet future growing power requirements; the cloud service software platform provides functions such as home charging, public charging operation, energy management, charging payment, promotion and marketing; the company also provides one-stop optical storage and charging energy management solutions. The self-developed EMS energy management system can achieve functions such as charging pile access, charging demand assessment, charging power distribution, and intelligent charging scheduling to quickly achieve charging station deployment; it can also quickly implement charging station deployment through V2G battery charging and discharge management algorithms and excellent scheduling The algorithm realizes interaction between vehicles and power grids, so that car owners can obtain additional benefits through power grid services.

The quality of operations continues to improve, and the effect of improving quality and efficiency is remarkable. The company continues to promote AI+ digital intelligence transformation. In terms of after-sales service, the company introduced the Salesforce platform to significantly improve after-sales service indicators and customer satisfaction. In the field of intelligent manufacturing, the company's manufacturing bases have launched MES (Manufacturing Execution System) and WMS (Warehouse Management System) to improve manufacturing efficiency and quality. In terms of improving management efficiency, the company developed and launched the Copilot Enterprise Intelligence Assistant. At the same time, the company planned and initiated the construction of a company-level data base, and launched digital analysis and signboard tools related to marketing, service, and R&D to support high-quality business insights and decisions. In the first half of 2024, the company achieved remarkable results in controlling various expense ratios: the sales expense ratio was 13.63%, down 1.78 percentage points from 15.41% in the first half of 2023; the management expense ratio was 7.10%, down 0.59 percentage points from 7.69% in the first half of 2023; and the R&D expense ratio was 16.43%, down 0.67 percentage points from 17.10% in the first half of 2023.

Actively give back to investors, and repurchases and dividends demonstrate long-term confidence. From January to June 2024, the company purchased a total of 7,665,527 shares of the company through centralized bidding transactions through the Shanghai Stock Exchange trading system, accounting for 1.70% of the company's total share capital of 451,877,086 shares at the end of the reporting period, demonstrating long-term confidence. The company focuses on return on investment. According to the proposal of Mr. Li Hongjing, the actual controller and chairman of the company, for the 2024 mid-term dividend, the company has formulated the “2024 Semi-Annual Profit Distribution Plan” to distribute a discovery dividend of 4 yuan (tax included) for every 10 shares to all shareholders based on the total share capital registered on the equity distribution share registration date after deducting the shares of the company's special accounts.

Maintain a “buy” rating. As a professional automotive intelligent analysis, inspection and comprehensive TPMS product and service provider, the company's traditional digital maintenance business is growing steadily, and the new digital new energy business is growing rapidly, and the future space is broad. We predict the company's 2024-2026 revenue of 4.048/4.952/6.013 billion yuan, and net profit of 0.539/0.644/0.809 billion yuan to maintain a “buy” rating.

Risk warning: risk of rising raw material prices; increased risk by industry competition; macroeconomic risk.