Hangcha (SH:603298) Tai Ping Yang·2024-08-22 10:00Investment Rating - The report maintains a "Buy" rating for Hangcha Group (603298) with a target price of 23.28, compared to the last closing price of 16.98 [1]. Core Views - The mid-year performance is impressive, with a revenue of 8.554 billion and a net profit of 1.007 billion, showing year-on-year growth of 3.74% and 29.29% respectively. The second quarter alone saw a revenue of 4.382 billion, up 1.53%, and a net profit of 628 million, up 28.19% [4]. - The company benefits from improved gross and net profit margins, with Q2 gross margin at 22.21%, up 2.27 percentage points year-on-year, and net margin at 15.28%, up 3.10 percentage points year-on-year [4]. - The growth is attributed to several factors: a shift in product mix towards lithium battery products, strong export growth, and lower raw material costs [4]. Summary by Sections Financial Performance - For the first half of 2024, the company achieved a revenue of 8.554 billion, a 3.74% increase year-on-year, and a net profit of 1.007 billion, a 29.29% increase year-on-year. Q2 revenue was 4.382 billion, up 1.53%, and net profit was 628 million, up 28.19% [4]. - The gross margin for Q2 was 22.21%, with year-on-year increases of 2.27 percentage points, while the net margin was 15.28%, with year-on-year increases of 3.10 percentage points [4]. Market Position and Strategy - The company is focusing on lithium battery electrification and international expansion. In the first half of 2024, electric forklifts accounted for 70.77% of sales, up 6.32 percentage points year-on-year [4]. - The company has established over 10 overseas sales companies and service centers, enhancing its international market presence and rental business [4]. Future Outlook - Revenue projections for 2024 to 2026 are 17.443 billion, 19.388 billion, and 22.313 billion respectively, with net profits expected to be 2.032 billion, 2.317 billion, and 2.718 billion [5]. - The report anticipates a target price of 23.28, corresponding to a 15 times PE for 2024, maintaining a "Buy" rating [4][5].