On August 26, Anhui Heli released its 2024 semi-annual performance report: in 2024, H1 achieved operating income of 9.009 billion yuan (+4.60% year-on-year increase), net profit of 0.803 billion yuan (+22.08% year over year), net profit of 0.72 billion yuan after deducting non-return net profit of 0.72 billion yuan (YoY +26.92%). Among them, Q2 2024 achieved operating income of 4.704 billion yuan (YoY +5.45%), net profit to mother of 0.413 billion yuan (YoY +4.56%), and net profit of 0.38 billion yuan (YoY +8.57%) after deducting non-attributable net profit of 0.38 billion yuan (YoY +8.57%).

Key points of investment

In line with the trend of electrification, the product structure continues to be optimized

According to statistics from the Industrial Vehicle Branch of the China Construction Machinery Industry Association in the past five years, in the context of the “3060” double carbon target, the share of electric vehicles in the total sales volume of China's industrial vehicle industry increased from 49.09% to 67.87% in 2019-2023.

The company closely follows the trend of electrification in the industry, successively launched a series of lithium battery new energy products such as G2 and H4, and pioneered the launch of 2-10 ton hydrogen fuel forklifts. It became the first company in the country to complete the licensing of hydrogen fuel forklifts through type testing and certification, and achieved continuous optimization and upgrading of the product structure. In 2023, the company's electric new energy products accounted for about 57% of sales, an increase of 6.20 pct over the previous year, with lithium battery products accounting for more than 60% of electric products. As the company vigorously promotes green development, performance is expected to usher in new breakthroughs.

Continuously improve the overseas layout, and international development has achieved remarkable results

The company further accelerated overseas market layout and business expansion, and officially opened Heli Oceania in July 2024, injecting new momentum into Heli's global strategy.

By the end of 2023, the company has established seven major overseas centers including Europe, Southeast Asia, North America, the Middle East, Eurasia, Oceania, and South America, and will continue to build a global strategic layout of “1 Chinese headquarters+N overseas centers+X global teams”.

In 2024, the company announced that it intends to invest in the establishment of Heli's European headquarters and Heli's overseas (Germany) R&D center to promote the implementation of the internationalization strategy in an orderly manner and further enhance competitiveness in the international market. In 2024, H1 achieved overseas revenue of 3.486 billion yuan, a year-on-year increase of 20.52%, and overseas market development continued to improve.

Expense control is good, and profitability has improved

The H1 sales expense ratio in 2024 was 4.23% (year-on-year +0.96pct), the management expense ratio was 2.49% (year-on-year +0.22pct), the R&D expenses rate was 5.40% (+0.62pct), the financial expenses ratio was -0.39%, and -0.13% for the same period in 2023.

The change in the company's sales expense ratio was mainly due to the company's increased domestic and foreign market layout and promotion efforts during the reporting period. The change in the financial expense ratio was mainly due to the year-on-year decrease in the company's interest expenses and exchange rate fluctuations during the reporting period, and the company's overall cost control capability improved. In 2024, H1 achieved a gross profit margin of 21.58% (+1.96pct year over year), and profitability improved.

Profit forecasting

The company is expected to benefit from product structure optimization and overseas market expansion. At the same time, considering the trend of electrification in the forklift industry, the company's revenue for 2024-2026 is 19.378, 21.688, 24.276 billion yuan, and EPS is 1.73, 2.04, and 2.35 yuan respectively. The PE corresponding to the current stock price is 10.6, 9.0, and 7.8 times, respectively, giving a “buy” investment rating.

Risk warning

The risk of macroeconomic cycle fluctuations and industrial policy changes; the risk of the market falling short of expectations; the risk of rising raw material prices; the risk of exchange rate fluctuations; and geopolitical risks.