Key points of the announcement: The company released its 2024 mid-year report. The results are in line with the quick performance report and in line with expectations. 2024H1 achieved revenue of 27.078 billion yuan, +0.24% year over year, net profit to mother of 0.637 billion yuan, +34% year over year, net profit of 0.638 billion yuan after deducting non-return net profit of 0.638 billion yuan, or +61% year over year. Of these, 24Q2 achieved revenue of 13.801 billion yuan, +0.06%/+3.94% year on month, net profit of 0.33 billion yuan, +19.96%/+7.75% year over month, net profit of 0.327 billion yuan after deducting non-return net profit of 0.327 billion yuan, +24.33%/+5.11% year over month.
Profits at home and abroad were recovered simultaneously, and the gross margin of the security business recovered significantly. The company's 24H1 achieved a gross profit margin of 15.6%, +2.14pct. Due to changes in accounting standards, the 2024H1 company moved the warranty fee of 0.079 billion yuan from sales expenses to operating costs, reducing the company's gross margin by about 0.3 pct. In the subregion, the gross margin of 2024H1's main domestic business was 18.3%, +2.3 pct year on year, and the overseas gross margin was 14.5%, and +2.1 pct year on year, mainly due to the expansion of domestic scale and the integration of production capacity in the overseas security business. By business, the 2024H1 automotive safety business gross profit margin was 13.9%, +3.3pt year on year. Overseas regional business integration was basically completed. The profitability of the European and American regional safety business continued to increase, and the automotive safety business performance achieved continuous quarter-on-quarter increases, and all four major global business regions have achieved profits; the 24H1 automotive electronics business gross margin was 19.4%, -0.5pct year over year, mainly due to the transfer of warranty fees into operating costs. On the cost side, the cost rate during 2024Q2 was 10.5%, -0.5pct/-1.3pct month-on-month. The year-on-month decrease was mainly due to the transfer of warranty costs from sales expenses. Net interest rate due to mother in 2024Q2 hit a new high after 2021. Net interest rate due to mother was 2.4%, +0.40pct/+0.08pct month-on-month; net interest rate without return to mother was 2.37%, +0.46pct/+0.03pct month-on-month.
Orders are plentiful, and the layout is accelerated in the field of intelligence. The total lifetime value of 24H1's global orders is about 50.4 billion yuan. Compared with 23H1's new order amount of 42.2 billion yuan, there is a significant increase. Among them, automobile safety business orders account for 79%, new energy model orders account for more than 60%, Chinese market orders account for more than 45%, and new orders of 63 billion yuan in the first 7 months of 2024. In the field of intelligence, the company has successively released intelligent driving domain controllers based on various chip platforms such as Qualcomm, Horizon, and Black Sesame, while also laying out different categories of smart driving products based on different needs at home and abroad.
Profit forecast and investment rating: Since it still takes time for the company to release ongoing orders, we maintained our 2024 revenue forecast at 60.4 billion yuan and lowered the 2025-2026 revenue forecast to 64.3/70.4 billion yuan (originally 67.7/75.8 billion yuan), +8%/+6%/+9% year-on-year respectively; basically maintaining a net profit of 1.51/2.04/2.74 billion yuan for 2024-2026, +40%/+35% /+ 34%, corresponding PE was 13/10/7 times, respectively, maintaining the “buy” rating.
Risk warning: The recovery in downstream passenger car demand falls short of expectations, and the recovery of the automobile safety business falls short of expectations.