Event: After the market on July 10, the company released the 2024 semi-annual results forecast.

The interim report's performance exceeded expectations; net profit to mother of 2024H1 is expected to increase 59%-77% year-on-year, and is expected to achieve 0.13 billion yuan to 0.145 billion yuan in the first half of 2024, an increase of 58.99%-77.34%; net profit after deducting non-return to mother 0.113 billion yuan to 0.128 billion yuan, an increase of 62.09%-83.61% year on year. In 2024Q2 alone, net profit due to mother is expected to be 7162 to 86.62 million yuan, up 7.48%-29.99% year on year; net profit after deducting non-return to mother is 6101 to 76.01 million yuan, up 4.9%-30.69% year on year.

The significant increase in the company's performance in the first half of 2024 was mainly due to 1) The company increased customer coverage, provided better solutions for customers and the industry, met customer needs, and continued increase in order size. According to the announcement, new orders increased 50% year-on-year from January to May 2024, maintaining rapid growth; 2) Continuing to expand overseas markets, actively develop new products and expand the application of existing products in new industries, gradually increasing the share of international business and increasing the business share of new products and related products in new industries; 3) The company adopted a series of lean management measures to implement cost reduction and efficiency management for all employees; by optimizing production processes, strengthening cost control, and introducing advanced management tools, etc., the company's profitability increased steadily.

Leading wind power safety equipment leader, strong domestic wind power+overseas and multi-field expansion opens up room for growth 1) Overseas market expansion: ① Stock market: The North American and European markets all have large inventory transformation needs, and the company can enjoy the blue ocean market of overseas stock transformation; ② New markets: The company has more room for improvement compared to the domestic market. The transformation of overseas stock markets and an increase in market share in new markets are expected to bring room for incremental performance.

2) Expansion in multiple fields: The company's products are moving towards platform-based enterprises in multiple fields, such as industry and construction, emergency rescue, power grids, etc. At present, many new products have been launched in emerging fields. Among them, material conveyors and tower climbers are expected to become the company's next best products. ① Material conveyors: The application field is overseas household photovoltaic construction. Overseas labor costs are high. Equipment can help construction teams reduce labor costs and is expected to become standard for construction teams; ② Tower cranes:

Tower cranes are the main application scenario. Currently, there are tower cranes in stock that have not yet been equipped with lifting equipment. As labor dividends decrease and emphasis on life safety increases, tower cranes are expected to be equipped with additional lifting equipment.

3) Increased demand in the domestic wind power market: ① Demand for new installed wind power: From January to January 2024, the domestic public tender market added a new tender volume of 23.3GW, a decrease of 13% over the previous year. Domestic wind power tenders have remained high since 2023. According to CWEA forecasts, in 2024, the new lifting capacity of domestic wind power was about 75GW-85GW, a rapid increase over the previous year; ② Product/solution optimization and iteration brought about an increase in the value of single fan product configuration. 1. Product iteration: The company launched a high-load lift and rack and pinion lift, which is significantly higher in price compared to ordinary lifts; 2. Solution optimization: The company launched a “dual-plane climbing” solution, that is, a lift+no crawler/climber, which increases the value of single fan configuration products; ③ Aftermarket demand: The wind power operation and maintenance market space is broad, which is expected to provide growth points for the company's medium- to long-term performance.

Profit forecast and valuation: Optimistic about the company's major development in the field of wind power and emerging applications, the 2024-2026 net profit is 0.311, 0.398, and 0.498 billion, up 50%, 28%, and 25% year-on-year, with CAGR = 27%. The corresponding PE is 17, 13, and 11 times, maintaining the “buy” rating.

Risk warning: 1) New domestic wind power installations fall short of expectations; 2) Expansion in overseas and other fields falls short of expectations.