Finance Associated Press September 30th (Reporter Huang Lu) Both the downstream commercial vehicle and passenger vehicle markets are stable in demand. Influenced by the rise in raw material prices, in the first half of the year, Hunan Oil Pump (603319.SH) saw slower growth in net profit compared to revenue growth, with a slight year-on-year decrease in gross margin. Chairman Xu Zhongqiu stated at today's semi-annual performance briefing that electronic pumps have been a key focus area in the company's recent strategic layout, and this business will become a growth point for the company in the future.

Regarding the electronic pump business, Xu Zhongqiu stated that in recent years, the company has developed multiple products including electronic oil pumps, electronic water pumps, electronic transmission oil pumps, and electronic vacuum pumps. Currently, the company's electronic pump products have gained recognition from well-known domestic and foreign customers such as BYD, Ideal, Volkswagen in Germany, Pekka in the USA, and Cummins in the USA. With the investment in one of the convertible bond projects, the "annual production of 3.5 million units of new energy electronic pump intelligent manufacturing project", the future will be a significant business growth point for the company. Additionally, in the field of flying cars, the company's pump products have obtained bulk orders from a top domestic flying car manufacturer.

According to the interim report, in the first half of 2024, Hunan Oil Pump achieved a revenue of 0.971 billion yuan, an increase of 11.08% year-on-year, and a net profit of approximately 91.7 million yuan, up by 7.3%. Among them, the H1 revenue from new energy vehicle parts reached 0.194 billion yuan, representing a growth of 71.85% year-on-year. The company mentioned that the performance growth is mainly due to sufficient orders during the reporting period, with sales revenue increases in main products such as diesel engine oil pumps, gearbox pumps, new energy vehicle parts, and motors.

The company's main purchased raw materials include gears, rotors, aluminum ingots, pig iron, steel, and aluminum die-cast billets. Due to slight increases in raw material prices, procurement costs have slightly risen, leading to a slight decrease in product gross margin.

Of particular note, in the first half of the year, the company raised funds of 0.577 billion yuan through convertible bonds. The capital raised is for the two major core projects: the annual production of 3.5 million units of new energy electronic pump intelligent manufacturing project, and the high-efficiency energy-saving brushless motor project, with a construction period of 2 years. Currently, these two investment projects are being implemented as planned.

Regarding the construction of overseas bases, Xu Zhongqiu introduced that the company plans to establish new production bases in North America and Thailand. The two major overseas production bases are currently proceeding with construction preparations according to plan, and the related production capacity will gradually be released in the future.

Among them, the North American production base is located in Guanajuato State, Mexico, mainly supplying automotive parts such as oil pumps, water pumps, electronic oil pumps, electronic water pumps, and aluminum castings to customers in the North American and European markets; the Thailand production base is located in Rayong Province, Thailand, mainly supplying automotive parts such as oil pumps, water pumps, electronic oil pumps, electronic water pumps, and aluminum castings to customers in Southeast Asia, Europe, and Japan and South Korea markets.