Key points of investment
Incident: The company released its 2024 semi-annual report, with a year-on-year increase of 28.6% in the first half of 2024 1) 2024H1 performance: 2024H1 achieved operating income of 18.95 billion yuan, up 4.0% year on year, and the overall revenue of the coal machine sector maintained a steady rise, mainly due to the growth of hydraulic supports and coal engine equipment. The automotive sector mainly saw a rapid increase in revenue related to new energy vehicle parts and a steady rise in commercial vehicle-related business revenue, which led to an increase in ASIMCO's overall revenue; net profit to mother 2.16 billion yuan, up 28.6% year on year, mainly due to the increase in net profit attributable to mother in the coal machine sector; net profit not to mother was 1.94 billion yuan, up 29.3% year on year. The weighted average return on net assets was 10.1%, an increase of 1.1 pct over the previous year. The results are in line with market expectations.
2) 2024Q2 performance: 2024Q2 achieved operating income of 9.28 billion yuan, up 3.1% year on year, down 4% month on month; net profit to mother was 1.12 billion yuan, up 24.6% year on year and 7.4% month on month.
The profitability of 2024H1 increased month-on-month, with significant results in cost reduction and efficiency 1) In terms of profit margin: 2024H1 gross margin was 24.1%, up 2 pcts year on year; net interest rate was 12.3%, up 2.4 pcts year on year. 2024Q2 gross margin was 24.3%, up 1 pct year on year, 0.4 pcts month on month; net margin was 12.5%, up 2 pcts year on year, up 0.4 pcts month on month.
2) In terms of period expenses: The cost rate for the 2024H1 period was 10.1%, a year-on-year decrease of 0.9 pct, of which the sales expense ratio was 2.3%, a year-on-year decrease of 0.9 pct; the management fee rate was 3.2%, an increase of 0.1 pct; the R&D expenses rate was 4.3%, a decrease of 0.3 pct; and the financial expenses ratio was 0.4%, an increase of 0.25 pct year-on-year. The financial expenses were mainly due to a decrease in exchange earnings.
Coal machinery: The coal machine industry is driven by multiple drivers, and the company's intelligent business continues to grow 1) The coal machine industry is driven by multiple drivers, and industry leaders are expected to benefit.
2) The company leads the intelligent product industry, and Hengda Intelligent Control's performance is growing rapidly.
Auto parts: The layout of NEVs has heavy snow, and the sector's performance is expected to reach an inflection point 1) Commercial vehicle boom will maintain an upward trend, and the layout of NEVs will be heavy snowfall.
2) Subsidiaries' quality and efficiency improvements are progressing smoothly, and the performance of the auto parts sector is expected to reach an inflection point.
Investment advice and profit forecasting
The company's revenue for 2024-2026 is estimated to be 39.3, 42.1, and 44.2 billion yuan, respectively, with year-on-year growth rates of 8.0%, 7.1%, and 5.0%, respectively. Net profit attributable to mother was 3.69, 4.02, and 4.31 billion yuan, respectively. The year-on-year growth rates were 12.7%, 9.0%, and 7.2%, respectively, and PE was 5.7, 5.2, and 4.9, maintaining the company's “increased holdings” rating.
Risk warning: 1) Raw coal production falls short of expectations; 2) coal prices fall short of expectations; 3) The increase in auto parts profitability falls short of expectations