AVIC Securities·2024-09-04 00:01Investment Rating - The investment rating for the company is "Buy" with a target price of 249.42 CNY, indicating an expected return of over 10% relative to the CSI 300 index in the next six months [5][23]. Core Views - The company has demonstrated strong performance with revenue of 301.13 billion CNY in H1 2024, a year-on-year increase of 15.8%, and a net profit of 13.63 billion CNY, up 24.4% year-on-year [1]. - The global electric vehicle market continues to grow at over 20%, with China's electric vehicle sales expected to reach 12 million units in 2024, a 26.4% increase year-on-year [2]. - The company maintains its position as the global leader in new energy vehicles, achieving a market share of 21.5% in H1 2024, with sales of 1.55 million units, a 30.3% increase year-on-year [2]. - The company is focusing on expanding its overseas market presence, with overseas revenue reaching 89.95 billion CNY in H1 2024, a 39.6% increase year-on-year, and accounting for 29.9% of total revenue [2][4]. Summary by Sections Financial Performance - In H1 2024, the company reported a gross margin of 20.0%, an increase of 1.7 percentage points year-on-year, and a net profit margin of 4.7%, up 0.3 percentage points year-on-year [1]. - The company’s automotive business revenue grew by 9.3% year-on-year to 228.32 billion CNY, with a gross margin of 23.9%, up 3.3 percentage points year-on-year [2]. Market Trends - The global electric vehicle market is projected to maintain a growth rate of over 20%, with China's market benefiting from price reductions and government incentives [2]. - The company is leveraging its competitive pricing strategy, which has resulted in a decrease in average vehicle price by 14.9% to 141,500 CNY in H1 2024, while maintaining strong profitability [2]. Strategic Initiatives - The company is investing in high-end technology and smart driving capabilities, launching new platforms and collaborating with Huawei to enhance its product offerings [3]. - The company has established production facilities in 77 countries and regions, including Brazil and Germany, to mitigate policy and trade risks while expanding its market reach [2][4]. Investment Outlook - The company is expected to benefit from the dual forces of domestic market recovery and international expansion, with projected net profits of 39.04 billion CNY, 46.45 billion CNY, and 58.45 billion CNY for 2024, 2025, and 2026 respectively [4][8].