New Clean Energy released its 2024 semi-annual report: in the first half of 2024, the company achieved operating income of 0.873 billion yuan, a year-on-year increase of 15.16%; realized net profit of 0.218 billion yuan, an increase of 47.45% year on year; realized net profit deducted from non-mother 0.214 billion yuan, an increase of 55.21% year on year.
Key points of investment
The results for the first half of the year exceeded expectations, and gross margin continued to rise for four consecutive quarters. In the first half of 2024, the company achieved operating income of 0.873 billion yuan, an increase of 15.16%; achieved net profit attributable to mother of 0.218 billion yuan, an increase of 47.45% year on year; realized net profit after deduction of 0.214 billion yuan, an increase of 55.21% year on year. Among them, Q2 2024 achieved operating income of 0.502 billion yuan, an increase of 35.01% month-on-month; net profit to mother of 0.118 billion yuan, an increase of 17.50% month-on-month; net profit after deducting non-attributable net profit of 0.131 billion yuan, an increase of 56.33% month-on-month, achieving a high profit increase. Looking at the gross margin situation, the company's gross margin has continued to rise for four consecutive quarters. It reached 36.53% in Q2 in 2024, up 1.83 percentage points from month to month, and the profit level continues to rise. In the first half of 2024, thanks to the gradual recovery of the downstream market, demand in emerging applications increased significantly, the company's inventory digestion accelerated, and some products were in short supply or continued to be ordered, driving steady growth in performance.
Vehicle regulation products have penetrated into the intelligent driving domain, and the company has further expanded the scale of cooperation with BYD. Since the end of 2023, the company's cooperation with BYD has switched to direct supply, enabling the introduction of more vehicle standard products. The number of products supplied increased by more than 50% year-on-year in the first half of 2024, and various models were used in important three-electric power modules such as OBC and DC conversion. For other car companies that have already established large-scale shipments, accelerate the provision of more AEC-Q certified product lines and expand the scale of sales products. The company's vehicle specification products have been delivered in large quantities to nearly 100 Tier 1 manufacturers and terminal car companies, and more than 10 new automobile customers have been introduced. From the original domain controller, main drive electronic control, engine cooling fan, brake controller, automatic start/stop, oil pump/water pump, PTC, OBC, electronic control suspension, etc., the company's products are further applied to intelligent driving and other modules requiring higher safety, high power, and high stability.
In terms of optical storage, the market is still recovering due to multiple impacts such as the resolution of the European energy crisis, the weakness of the global economy, and the rapid increase in photovoltaic companies, and achieved a significant recovery in the first half of 2024. Among them, the mixed grid and off-grid markets within 20KW are affected by unstable power supply factors in Africa and other regions, and demand in this market has grown rapidly, forming a growth point. The company actively explores this market, promotes seventh-generation IGBT products, and takes the initiative to remove inventory of some IGBTs in stock in response to the fast supply and low cost characteristics of this market. In the long run, there is still huge room for optical storage development. The company has seized leading customers in the industry and effectively formed an increase in orders.
AI servers and emerging sectors of the low-altitude economy are expected to drive rapid growth in potential demand
In recent years, as domestic and foreign manufacturers accelerate the deployment of large models with 100 billion parameters, training demand and inference demand have grown rapidly, boosting the AI server market and shipment volume. On the one hand, the company's products continue to make efforts in the traditional server field to gain more market share; on the other hand, the company uses its advantages to develop products around the needs of AI computing power servers and is actively developing downstream customers. Currently, the company's related products have been finally used by leading overseas customers in the GPU field and have achieved mass sales, and more material numbers have been verified, and will grow even more rapidly in the future.
Furthermore, with the intensive introduction of industry support policies for the low-altitude economy and the gradual opening up of low-altitude airspace, low-altitude economy-related products such as drones (consumer grade and industrial grade), helicopters, and eVTOL (electric vertical take-off and landing aircraft) will have broader market prospects. The company's MOSFET products are used in core components such as drone BMS and electric drives, and some customers have achieved mass sales. At present, China's low-altitude applications and demand are far from being saturated, and the company is expected to benefit.
Profit forecasting
The company's revenue for 2024-2026 is 1.848, 2.278, and 2.963 billion yuan, respectively, and EPS is 1.01, 1.30, and 1.58 yuan respectively. The current stock price corresponds to PE of 31.5, 24.4, and 20.1 times, respectively. The company has a multi-point layout. As downstream demand continues to pick up, performance is expected to increase rapidly, maintaining a “buy” investment rating.
Risk warning
Macroeconomic risks, risk of product development falling short of expectations, risk of increased industry competition, risk of downstream demand falling short of expectations.