2024H1:1) Achieved revenue of 7.529 billion yuan, +15.73%; realized net profit of 0.709 billion yuan, +28.49% year over year; realized net profit of 0.687 billion yuan, +32.05% year over year; 2) gross profit margin for the first half of the year was 31.51%, -1.07pct year on year; net profit margin to mother 9.41%, +0.94 pct year on year; 3) The cost ratio for the period was 18.78%, -2.28pct, sales/management/R&D/finance expense ratios were 9.69%, 4.91%, 6.08%, and -1.9%, respectively, with year-on-year changes of -2.95, +0.47, +0.28, and -0.08pct, respectively.

2024Q2 single quarter: 1) Achieved revenue of 4.468 billion yuan, +23.2% year over month, +45.96% month on month; realized net profit of 0.431 billion yuan, +26.35% year on year, +55.4% month on month; realized net profit without return to mother 0.415 billion yuan, +28.02% year on month, +52.52% month on month; 2) Q2 single quarter gross profit margin of 30.82%, -0.52 pct year on month; net profit margin to mother 9.65%, year over year + 0.24pct, +0.59pct month-on-month; net profit margin 9.29% without return to mother, +0.35pct year-on-year, +0.4pct month-on-month.

By product: 1) Four-wheelers: 24H1, with cumulative sales of 0.0814 million all-terrain vehicles, achieving revenue of 3.532 billion yuan, or -1.55% YoY; 2) Two-wheelers: 24H1, two-wheeler sales of 0.1539 million vehicles, +56% YoY, achieving revenue of 3.248 billion yuan, +41.95% YoY. Among them, domestic sales were 0.068 million vehicles, +42% year over year, domestic sales revenue was 1.446 billion yuan, +38% year over year; export sales were 0.086 million vehicles, +69% year over year, and export sales revenue was 1.802 billion yuan, +45% year over year.

1) The brand went overseas and attacked the world in two rounds plus four rounds: Qatar won the first race in the first half of 2024, winning the first championship trophy belonging to a Chinese manufacturer in the 75-year history of MotoGP's top motorcycle series. The export value of all-terrain vehicles accounts for 71.75% of the domestic export value of similar products, making it a leading position in the industry. Distribution outlets in the US market continue to expand, and the European market continues to rank first in market share.

The export performance of two-wheeled motorcycles is impressive, with a cumulative network of more than 1,500 dealers. 2) The rise of domestic high-displacement motorcycles has broad room for growth: more and more consumers are paying attention and entering the motorcycle gaming band, becoming an intrinsic driving force for industrial development; benefiting from a new round of technological revolution and industrial transformation, China's motorcycle manufacturing industry is accelerating its transformation to high-end, intelligent and green. The high-displacement motorcycle industry continues to introduce new developments, driving the further growth of the domestic motorcycle industry. The company stands out from the domestic medium and large displacement motorcycle racetracks and continues to launch popular products. The completeness and maturity of the product lineage has rapidly improved, and the sales volume of >250cc high-displacement motorcycles already ranks first in the country. 3) The employee stock ownership plan shows confidence. The cumulative revenue assessment index for three years is not less than 30.5 billion yuan: According to the latest announcement issued by the company on August 7, 2024, the number of stock options to be granted to incentive recipients is 3.55 million shares, accounting for 2.34% of the total share capital. 3.3725 million shares of stock options were granted for the first time, accounting for 2.23% of the total share capital. The license price is 106.00 yuan/copy. The minimum revenue assessment target for employee stock ownership plans is 14 billion in 2024, no less than 30.5 billion yuan for the two years 2024 to 2025, and no less than 50.5 billion yuan for the three years from 2024 to 2026, demonstrating confidence in continued growth.

Profit forecast: The company's actual profit for 2023 did not meet our previous profit forecast. We lowered our profit forecast. The net profit for 24-26 is 1.318, 1.661, 2.078 billion yuan (24-25 years ago: 1.505, 1.919 billion yuan), corresponding PE is 14.73, 11.68, 9.34 times, maintaining a “buy” rating.

Risk warning: risk of macroeconomic fluctuations, risk of adverse changes in trade policy, risk of increased market competition, risk of new product development