Xingyu Co.,Ltd(SH:601799) HTSC·2024-08-16 10:03Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 151.39 [2][3]. Core Views - The company's Q2 performance exceeded expectations, showcasing growth momentum with H1 revenue of RMB 57.17 billion, a year-on-year increase of 29.20%, and a net profit of RMB 5.94 billion, up 27.34% year-on-year [3][4]. - The significant contribution from new energy vehicle models, particularly the AITO M9, is expected to drive further revenue growth [4][6]. - The company maintains a strong gross margin of 20.37% in Q2, with a net margin improvement to 10.64% [5][6]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of RMB 57.17 billion, with a net profit of RMB 5.94 billion and a non-recurring net profit of RMB 5.58 billion [3]. - Q2 revenue reached RMB 33.04 billion, reflecting a year-on-year growth of 32.07% and a quarter-on-quarter increase of 36.98% [3]. - The company forecasts EPS for 2024-2026 to be RMB 5.62, RMB 7.64, and RMB 9.88 respectively [3]. Growth Drivers - The AITO M9 model's sales surged, contributing significantly to Q2 revenue, with production increasing by 278% to 48,000 units [4]. - Other new energy models, such as the Li Auto L6, are also expected to contribute to revenue growth as they ramp up production [4]. - The company is strategically positioned with new energy vehicle clients, enhancing its growth potential [6]. Profitability Metrics - The gross margin for Q2 was 20.37%, with a slight increase from the previous quarter [5]. - The net profit margin improved to 10.64%, indicating effective cost management despite increased impairment losses [5]. - The company anticipates further improvements in net profit margins as high-value projects enter production [5][6]. Market Position and Strategy - The company is advancing its global expansion, with production capacity in Serbia and new entities established in Mexico and the USA to capture more North American clients [6]. - The company holds a competitive edge in the automotive lighting sector, with a focus on high-value new energy vehicle projects [6].