WOLONG ELECTRIC(SH:600580) Guoyuan Securities·2024-09-06 04:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 10.49 CNY over a 6-month period [3][8]. Core Insights - The company reported a slight revenue increase of 2.09% year-on-year, reaching 7.978 billion CNY in H1 2024, while net profit decreased by 35.09% to 393 million CNY [1]. - The gross margin for H1 2024 was 25.70%, a decrease of 0.48 percentage points compared to the previous year, and the expense ratio increased to 19.28%, up by 1.99 percentage points [1]. - The company is strategically focusing on multiple sectors, including renewable energy, electric transportation, and low-altitude economy, positioning itself as a leader in electric aviation [1]. Summary by Sections Financial Performance - In H1 2024, the company achieved a revenue of 7.978 billion CNY, with a net profit of 393 million CNY, reflecting a year-on-year decline of 35.09% [1]. - The report forecasts revenues of 17.084 billion CNY, 18.739 billion CNY, and 20.475 billion CNY for 2024, 2025, and 2026 respectively, with corresponding net profits of 929 million CNY, 1.074 billion CNY, and 1.218 billion CNY [2][7]. Business Strategy - The company is diversifying its product offerings across various sectors, including industrial motors, consumer electronics, and electric transportation, while enhancing its position in the renewable energy market [1]. - The focus on low-altitude economy aligns with national strategic initiatives, and the company has been developing advanced electric motor products for urban air transport since 2019 [1]. Market Position - The company is actively participating in the formulation of standards for electric propulsion systems in aviation, which is expected to create regulatory barriers that favor its market position [1]. - The report highlights the company's commitment to innovation and efficiency improvements in its product lines, particularly in HVAC, home appliances, and electric vehicles [1].