24Q2's revenue scale increased steadily, and short-term profit pressure was placed on 24H1. The company achieved revenue of 0.645 billion yuan, +28.10% year over year. Of these, Q2 achieved revenue of 0.333 billion yuan, +18.20% year over year, and +6.52% month over month. 24H1 achieved net profit of 0.094 billion yuan, +29.05% year-on-year, and realized net profit without deduction of 0.072 billion yuan, or +49.89% year-on-year. Among them, Q2 achieved net profit attributable to mother of 0.038 billion yuan, -13.51% year-on-year, and -30.55% month-on-month; realized net profit of 0.028 billion yuan without return to mother, -7.30%, or -35.85% month-on-month. The company's Q2 performance fell slightly short of previous expectations, mainly due to a month-on-month decline in gross margin due to the increase in integrated products, and a year-on-year increase in cost ratios due to increased investment in sales and R&D.

Increased investment in R&D and sales led to a year-on-year increase in cost rates

The company achieved gross profit margin of 31.23% on 24 H1, +3.19pct year on year; achieved net profit margin of 14.54% to mother, +0.11pct year on year. Among them, Q2 achieved gross profit margin of 29.72%, year-on-year +0.95pct, and -3.11pct month-on-month; realized net profit margin of 11.56%, -4.24pct yoy, and -6.17pct month-on-month. The company's Q2 sales/management/R&D/finance expense ratios were 4.61%/5.99%/13.78%/-2.41%, respectively, +1.45/+1.33/+3.43/+0.99pct, respectively. We believe that the main reason for the month-on-month decline in the company's Q2 gross margin was the increase in the share of integrated products. The year-on-year increase in the sales expense ratio is mainly due to increased investment in marketing, and the increase in R&D expenses is mainly due to the company's increased investment in R&D in emerging fields such as robotics.

The precision injection molded parts business grew at a high year-on-year rate. The gross margin declined by business. 24H1's micro transmission system business achieved revenue of 0.413 billion yuan, +24.22% year over year; precision injection molded parts achieved revenue of 0.206 billion yuan, +34.36% year over year; and precision molds and others achieved revenue of 0.026 billion yuan, or +47.83% year over year. The company's micro transmission system achieved a gross profit margin of 29.78%, +4.88pct year on year, 37.86% of precision injection molded parts, 2.29pct year on year, and 2.96% of precision molds and other gross profit margin, +20.70pct year on year. We believe that the reason for the high revenue growth in the company's precision injection molding business is the increase in bicycle value brought about by integrated solutions, and the year-on-year decline in gross margin is the result of integration.

The development of fully driven dexterous hands for humanoid robots has made positive progress. Starting from the field of microdriving, the company has always paid attention to cutting-edge robot technology, actively laid out humanoid robot tracks, developed bionic robot dexterous hand products, and delivered samples to major customers, and made certain progress.

Investment advice

The company's automotive electronics continues to contribute to growth, the XR business space can be expected, and the humanoid robot dexterous business has broad prospects. We expect the company's 2024-2026 net profit to be 0.199/0.255/0.318 billion yuan, EPS of 0.83/1.07/1.33 per share, corresponding PE of 44/35/28 times, maintaining a “buy” rating.

Risk warning

Downstream customer sales fell short of expectations; promotion of new products such as robot dexterous hand modules fell short of expectations.