In 2024, H1 achieved revenue of 4.193 billion yuan, +46.23% year-on-year. Among them, automotive electronics achieved revenue of 3.071 billion yuan, +65.41% year-on-year; precision die-casting achieved revenue of 0.914 billion yuan, +23.55% year-on-year. Achieved net profit of 0.287 billion yuan to mother, +57.89% year-on-year.

Mass production of new categories of automotive electronics progressed, and joint venture customer projects increased. In 2024, H1's automotive electronics products achieved revenue of 3.071 billion yuan, +65.41% year-on-year. Automotive electronics products accounted for 73.23% of the company's total revenue, +8.5 pct year on year. The gross margin of automotive electronics was 20.71%, -1.17pct year on year. In 2024, new product lines such as H1 cockpit domain control, precision motion mechanisms, and digital acoustics entered the large-scale mass production stage one after another, and sales revenue increased sharply year-on-year; sales revenue of large-scale mass-produced products such as screen displays, LCD meters, HUD, in-vehicle wireless charging, and in-vehicle cameras increased dramatically. The company's customer base continues to expand, and the number of joint ventures and international car company customer projects has increased, breaking through SAIC Audi and receiving multiple project targets, getting new customer projects such as Stellantis Group, Changan Mazda, Changan Ford, Beijing Hyundai, Daimler, etc., and receiving new projects from domestic car companies including Great Wall, Changan, Chery, GAC, BAIC, JK, NIO, Xiaopeng, and BYD.

Continue to develop our areas of advantage and lead the development trend of the industry

In 2024, H1 invested 0.373 billion yuan in R&D, a year-on-year increase of 25.57%, accounting for 8.90% of revenue.

In terms of domain controllers, the company launched an integrated cabin domain control product based on the Qualcomm 8255 chip; simultaneously developing integrated cabin driving and central computing unit products based on the Qualcomm 8775 chip, which is expected to be launched in the second half of this year. In the HUD field, VPD virtual panoramic display products were the first to be launched in China, bringing a new cockpit experience. The targeted project is expected to be mass-produced next year. In recent years, competition for smart cockpit configurations has gradually diversified, the design of screen motion mechanisms has gradually increased, the company's own advantages in precision components and screen products, and the company's projects such as sliding screens, offset screens, ceiling screens, and suspended screens have gradually increased, leading the industry trend.

Precision die casting progressed steadily, and orders in the automotive and 3C sectors increased. In 2024, H1's precision die-casting business achieved revenue of 0.914 billion yuan, +23.55% over the same period. The gross margin of the precision die-casting business was 25.73%, -0.35pct year on year. In 2024 H1, the company's precision die-casting business increased dramatically in orders for components such as Sino-Singapore Energy's tri-electric systems, intelligent driving systems, automotive high-speed high-frequency, and 3C connectors; it was targeted by customers such as ZF, Bosch, Borg Warner, BYD, Weipai, UMC, and Freya (HELLA).

Profit forecasting and valuation

We expect the company's 2024-2026 revenue to be 9.033, 11.394, and 14.173 billion yuan, respectively, and net profit to mother of 0.643, 0.811, and 1.033 billion yuan, corresponding to PE19/15/12 times. Considering the company's leading HUD position, automotive electronics products are gradually expanding in the direction of intelligent driving, maintaining a “buy” rating.

Risk warning

The increase in HUD penetration fell short of expectations; the expansion of electronic products fell short of expectations; and the automobile price war heightened the risk.