Event: The company announced a preliminary increase in 2024 semi-annual results. The company's 2024H1 is expected to achieve net profit of about 50.2 million yuan to 57.6 million yuan, an increase of 35% to 55% over the previous year; net profit after deduction is about 48.5 million yuan to 54 million yuan, an increase of 100% to 123% over the previous year.

Q2 Profits grew rapidly, and polymer finishing materials performed well. According to the company's performance pre-increase announcement, Q2 expects to achieve net profit of 37.93-45.33 million yuan, an increase of 30.61%-56.09% year on year; net profit after deduction of about 38.43 million yuan to 43.93 million yuan, an increase of 74.14% to 99.06% year on year. 2024H1 is committed to the pan-home furnishing industry strategy, strengthening the collaborative development and mutual empowerment of various business segments, continuously expanding the market, promoting channel sinking, and exploring customer needs. The operating revenue of 2024H1's polymer composite finishing materials business segment continued to grow, and orders for high-margin products increased. At the same time, the company continued to deepen fine management, strictly reduce costs and increase efficiency, overall expenses were reduced year-on-year, and operating quality continued to improve.

Architectural ceramics continue to tap supply chain potential, and polymer finishing materials are developing rapidly. In terms of the building ceramics supply chain, the company is speeding up the construction of central warehouses, which helps reduce dealer inventory pressure, improve distribution efficiency, and reduce logistics costs. The company's polymer finishing materials include automotive interiors, fireproof panels, home decoration finishing materials, etc. The company continues to develop customers and orders for home decoration materials, while seizing the market opportunities of rapid development of new energy vehicles, and polymer finishing materials are developing rapidly.

Grasp the development trend of complete decoration and adhere to the “ceramic+big household” dual-track parallel strategy. With the “ceramic+big home” dual-track development strategy, with new environmentally friendly finishing materials as the core, the company deepened and expanded the product development, installation and delivery process around the prefabricated interior concept, launched integrated sales and service of wall panels, floors, and tiles, and launched new tracks for high-end whole-house delivery and partial renovation of old houses. The company launched a new business format of “Eagle Life” and “Eagle Renovator”. The company's business model continues to be upgraded and iterated, which is expected to drive up customer unit prices in the future.

Profit forecast and investment rating: The company is based on the two major businesses of architectural ceramics and polymer composite finishing materials, and focuses on driving product sales around the pan-home furnishing industry chain layout. Its subsidiary Yingpai Tiles has formed an asset-light operating model with high turnover, and the channel and business scale continue to expand; automotive interiors in polymer materials are growing rapidly, and the two major infrastructure industries are developing steadily. We maintain an estimated net profit of 0.159/0.188/0.228 billion yuan for 2024-2026, and the corresponding PE is 12X/10X/8X, respectively. Considering the space and potential for the company's new business integration and expansion, we maintain an “gain” rating.

Risk warning: the risk of fluctuations in raw materials and energy prices, the risk of increased market competition, and the risk of repayment of accounts receivable.