Incident: 1H24 achieved revenue of 0.97 billion yuan, +14.1% year over year; realized net profit of 37.9 million yuan, +101.6% year over year; realized deducted non-net profit of 32.08 million yuan, +143.7% year over year.
2Q24 achieved revenue of 0.481 billion yuan, +4.0%/-1.8% YoY; realized net profit of 21.46 million yuan, +65.2%/+30.6% YoY; realized deducted non-net profit of 17.38 million yuan, +86.5%/+18.1% YoY respectively.
1. Revenue side: Stable base & new product release, 1H24 revenue growth is steady. 1H24 achieved revenue of 0.97 billion yuan (YoY +14.1%), and 2Q24 achieved revenue of 0.481 billion yuan (+4.0%/-1.8% month-on-month, respectively), mainly due to the steady growth of the chassis parts business, mass production of new projects such as Bosch IPB-Flange, and export business growth. By business, 1H24 chassis steering damping/chassis precision machining/aluminum alloy lightweighting/air conditioning compressors achieved revenue of 0.571 billion/0.115 billion/0.069 billion/0.216 billion yuan respectively. In terms of exports, 1H24's main export business revenue was 70.87 million yuan (+10.8% year over year).
2. Profit side: 2Q24 gross margin rebounded significantly year-on-year. 1) Gross profit margin: 1H24's gross margin was 19.2% (+1.5pct year on year), 2Q24's gross margin was 19.4% (+1.3 pct/+0.3 pct month-on-month, respectively), mainly due to the gradual release of scale effects and internal cost reduction results; 2) Expense ratio: 1H24 company's four expense ratios +0.2pct year over year, 2Q24's four cost ratios were +1.6pct/month-on-month, respectively. 0.9 pct; 3) Profit margin: The deducted non-net interest rate for the 1H24 company was 3.3% (+1.8pct year on year), and the non-net interest rate for the 2Q24 company was 3.6% (+1.6pct/month-on-month, respectively). Among them, 2Q24 credit impairment losses positively affected the profit margin by 1.9pct/0.5pct month-on-month.
Chassis systems, air conditioning compressors, and lightweight projects continued to be obtained, and the robot production line construction process was smooth. 1) The company's new chassis parts, such as VGR steering gears and active shock absorbers, were designated by customers such as Nexteer, FAW Guangyang, BYD, Mandu, and Marelli; the aluminum alloy lightweight business was targeted by customers such as integrated valve terminals and control arms for more models from BYD; electric compressors were targeted by customers such as BAIC Foton, SAIC Chase, BAIC Off-road, and JAC; the integrated thermal management system was designated by customers such as Foton Daimler and Jirui United Heavy Industries; 2) Promoting the development of samples of screw products for humanoid robots, the company has accumulated in the field of automobile chassis The production process is highly homologous to the production process of screw products, and it is expected that related technological breakthroughs will be achieved. In the first half of 2024, the company focused on building a screw production line for humanoid robots, and the equipment for the corresponding process is quite complete.
Investment proposal: The company's main business includes three major segments: chassis parts business, aluminum alloy lightweight business, and air conditioning compressor business. The company dominates the domestic steering gear rack and shock absorber piston rod segments. Air conditioning compressor products have maintained a leading position in the commercial vehicle sector in recent years, and the company is actively deploying screw components for humanoid robots. We expect the company to achieve operating income of 2.148 billion yuan, 2.439 billion yuan, and 2,711 billion yuan in 2024, 2025, and 2026, and corresponding net profit of 0.085 billion yuan, 0.1 billion yuan, and 126 million yuan. Based on the closing price of August 14, PE will be 67.6 times, 57.2 times, and 45.6 times, maintaining the “increase” rating.
Risk warning: The recovery of the downstream automobile industry falls short of expectations; the mass production process of new projects falls short of expectations; the progress of new product development falls short of expectations; the construction of humanoid robots falls short of expectations; risk of fluctuations in raw material prices