Investment Rating - The report maintains a "BUY" rating for Intron Tech [15][16]. Core Insights - Intron Tech reported 1H24 revenue of RMB 2.84 billion, an 8% year-over-year increase, but net profit fell to RMB 97.7 million, a 37% decline year-over-year, primarily due to a gross profit margin (GPM) decline to 15.9% [1][19]. - The company expects a recovery in net profit margin in 2H24E driven by new order wins in new energy and ADAS, as well as expansion into overseas markets [1][15]. - The target price has been adjusted to HK$ 2.35, based on a lowered 10x FY24E P/E, reflecting near-term industry headwinds [1][15]. Financial Performance - 1H24 revenue growth was driven by strong performance in the new energy segment, which grew 16% year-over-year, while other segments like body control and powertrain saw declines [1][12]. - The GPM for 1H24 was 15.9%, down from 20.6% in 1H23, indicating pricing pressures along the auto supply chain [1][19]. - The report projects FY24E revenue to be RMB 6.32 billion, with a net profit of RMB 225 million, reflecting a 29% decline year-over-year [10][19]. Segment Analysis - The new energy segment is expected to continue its growth trajectory, with revenue projected to reach RMB 3.26 billion in FY24E, reflecting a year-over-year growth of 17.1% [12][19]. - The body control segment is projected to grow modestly, with revenue expected to reach RMB 951 million in FY25E, reflecting a 5% year-over-year increase [12][19]. - The powertrain segment is anticipated to face challenges, with a projected revenue decline of 23.1% in FY24E [12][19]. Valuation Metrics - Intron Tech is currently trading at 5.4x FY24E P/E and 3.2x FY25E P/E, which is considered attractive compared to peers in the automobile components sector [15][16]. - The report highlights that Intron's high return on equity (ROE) levels further support its undervaluation [15][16]. Upcoming Catalysts - Key catalysts for future growth include increased penetration of ADAS technologies and gaining market share among new energy vehicle clients [1][15].
英恒科技：1H24 below on weaker margin; Lower estimates on near-term industry headwinds