Core views

The company continues to focus on the big customer strategy, dig deeper into the market potential of existing major customers, and actively expand new customer groups. In the first half of the year, revenue increased 26.90% year-on-year, and continued to grow well. Q2 revenue reached a record high in a single quarter. Gross margin declined year-on-year in the first half of the year due to product restructuring, exchange gains and losses, and increased competition in the industry. Excluding the impact of exchange gains and losses, net profit for the first half of 2024 increased 21.47% year over year. The company continues to invest heavily in R&D and has a rich product line and is speeding up overseas. The company's market share is expected to increase further in the future.

occurrences

The company released its 2024 semi-annual report. In the first half of 2024, the company's revenue was 0.659 billion yuan, up 26.90% year on year, and net profit to mother was 90.42 million yuan, down 2.22% year on year.

Brief review

1. Q2 revenue reached a record high, and product structure, exchange, etc. affected profit growth in the short term.

In the first half of 2024, the company continued to focus on the big customer strategy, explore the market potential of existing major customers, and actively expand new customer groups. The company achieved good revenue growth in the first half of the year.

In the first half of 2024, the company achieved revenue of 0.659 billion yuan, a year-on-year increase of 26.90%, and realized net profit to mother of 90.42 million yuan, a year-on-year decrease of 2.22%. The decline in net profit was mainly due to product restructuring, the impact of exchange profit and loss, and increased competition in the industry. In the first half of 2024, the company's gross profit margin was 24.90%, down 2.16pcts year-on-year. Excluding the impact of exchange gains and losses, the company's net profit increased 21.47% year-on-year in the first half of 2024.

Looking at product segments, in the first half of 2024, the company's smart appliance controller revenue was 3.7.3 billion yuan, up 32.97% year on year, with a gross profit margin of 26.58%, up 0.05 pcts year on year. Among them, revenue from innovative small household appliances increased 22.80% year on year, and revenue from large appliances increased 38.51% year on year; revenue from robots and innovative smart products was 0.12 billion yuan, up 5.46% year on year, and gross profit margin of 20.04%, down 10.63 pcts year on year; power tools revenue was 0. 9.9 billion yuan, up 56.87% year on year, gross profit margin 11.80%, down 2.50 pcts year on year; vehicle electronic controller revenue was 0.036 billion yuan, down 10.76% year on year, gross margin was 43.34%, up 5.20 pcts year on year; new energy revenue was 0.018 billion yuan, up 92.30% year on year, gross profit margin was 49.12%, up 5.57 pcts year on year; other revenue was 0.012 billion yuan, up 3.97% year on year The gross profit margin was 36.64%, up 15.12pcts year over year.

Looking at market segments, in the first half of 2024, the company's domestic revenue was 0.378 billion yuan, up 26.79% year on year, gross profit margin was 24.73%, down 2.51 pcts year on year; foreign revenue was 2.8.1 billion yuan, up 27.05% year on year, and gross profit margin was 25.12%, down 1.68 pcts year on year.

In the second quarter of 2024, the company achieved revenue of 0.401 billion yuan, a year-on-year increase of 30.90% and a month-on-month increase of 55.20%. Revenue hit a record high in a single quarter, achieving net profit to mother of 50.68 million yuan, a year-on-year decrease of 27.22%; gross profit margin was 23.54%, a year-on-year decrease of 5.54 pcts.

2. Continue to actively expand the market and customers, increase R&D investment to enrich the product line, and accumulate growth.

In the first half of 2024, the company's sales expenses were 12.23 million yuan, up 29.06% year on year; management expenses were 15.89 million yuan, up 25.59% year on year; R&D expenses were 46.28 million yuan, up 27.67% year on year. The total three expenses for sales, management, and R&D were 74.4 million yuan, up 27.45% year on year, and 11.30% year on year, up 0.05 pcts year on year.

3. Accelerate overseas, and Vietnamese companies account for 20% of revenue.

In order to meet the needs of overseas customers, some of the company's products have accelerated “going overseas”. In June of this year, the company's board of directors and supervisors deliberated and passed the “Proposal on Capital Increase to Vietnam's Sun Company”, agreeing that the company would use its own funds to increase the capital to Zhenbang Intelligence (Vietnam) by 13.5 million US dollars through its wholly-owned subsidiary Zhenbang Intelligent Technology (Hong Kong) Co., Ltd. The company's Vietnamese production capacity increased rapidly. In the first half of 2024, the Vietnamese company's revenue increased by 185.46% year-on-year, accounting for 20.26% of revenue.

4. Profit prediction and investment advice.

The company continues to focus on the big customer strategy, dig deeper into the market potential of existing major customers, and actively expand new customer groups. In the first half of the year, revenue increased 26.90% year-on-year, and continued to grow well. Q2 revenue reached a record high in a single quarter. Due to product restructuring, exchange gains and losses, and increased industry competition, gross margin declined year-on-year, and net profit to mother fell slightly by 2.22% year-on-year. Excluding the impact of exchange gains and losses, net profit for the first half of 2024 increased 21.47% year over year. The company continues to invest heavily in R&D and has a rich product line and is speeding up overseas. The company's market share is expected to increase further in the future. We expect the company's 2024-2026 revenue to be 1.604 billion yuan, 2.005 billion yuan, and 2.465 billion yuan, respectively, and net profit to mother of 0.246 billion yuan, 0.312 billion yuan, and 0.391 billion yuan, respectively. Corresponding to the current stock price PE is 15x, 11x, and 9x, respectively, maintaining a “buy” rating.

5. Risk warning: Changes in the macroeconomic environment affect consumer demand in the terminal market, demand for intelligent controllers falls short of expectations; market competition intensifies, affecting the company's supply share of major customers, market expansion falling short of expectations, or leading to a decline in the company's gross margin; changes in trade policy, affecting the company's raw material supply and product delivery; chip shortages and price increases exceed expectations, affecting the company's gross profit margin; large exchange rate fluctuations affect the company's gross margin and exchange profit and loss; the revenue growth rate of the new energy business falls short of expectations; the gross margin of the new energy business falls short of expectations; the gross margin of the new energy business falls short of expectations; the company's gross margin falls short of expectations; Increased production efficiency, supply chain optimization, and cost control falling short of expectations, etc.