Incident: The company released a semi-annual performance forecast for 2024, which is expected to achieve net profit of 88-98 million yuan in the first half of 2024, with a year-on-year increase of 9348.14%-10421.8%. Of these, the net profit for the second quarter is expected to be 46.7284-56.7284 million yuan, up 212.27%-279.09% year-on-year, up 13.22%-37.45% month-on-month; it is expected that 2024H1 will achieve net profit without return to mother of 78-88 million yuan, of which In the second quarter, net profit without return to mother is expected to be 40.1815-50.1815 million yuan, up 348.55%-460.18% year-on-year and 6.25%-32.69% month-on-month.
The volume and price of PU synthetic leather products rose sharply, and 24Q2 profits reached a record high. During the reporting period, the volume and price of the company's main products rose sharply, revenue increased dramatically, and profits increased dramatically, achieving the best results in the same period in history. Among them, many indicators for the second quarter reached the highest record in a single quarter. During the reporting period, the company's sales volume of PU synthetic leather products increased by about 19.7% year on year, revenue increased by about 29.1% year on year, average unit price showed a steady upward trend, and gross margin increased significantly year on year. The company deepens cooperation with brand customers, optimizes customer structure and product structure, and increases the proportion of high-margin, high-value-added products such as sports, electronic products, and automotive interiors. The company strengthens enterprise management reform, actively optimizes and adjusts the structure, improves operating capacity, reduces costs and expenses, the results of transformation and upgrading are beginning to show, and its overall competitiveness continues to improve. The government subsidy included profit and loss during the reporting period was approximately $13.1,782 million.
The company and Amway Vietnam have simultaneously become qualified suppliers of adidas, creating new growth momentum for the company.
2024Q2 and its holding subsidiary Amway Vietnam have also become qualified suppliers of Adidas in Germany. The company has been in contact with Adidas since August 2015. After years of hard work, it passed the supplier review in May 2024 to provide footwear products with a series of footwear materials such as polyurethane synthetic leather, TPU, water-based breathable leather, and microfiber polyurethane synthetic leather. Adidas is an influential sports and leisure brand in the world. The company and Amway Vietnam's qualified suppliers are a new driving force for the company's growth, indicating that the company has excellent comprehensive competitive strength, which helps the company and Amway Vietnam obtain more orders and further enhance revenue and profitability.
Categories such as automotive interiors, electronic products, and functional shoe materials are progressing hand in hand and are growing well. During the reporting period, due to adverse factors such as the slump in the housing market and rising shipping costs, some overseas customers delayed or suspended their orders, and their share of the company's revenue changed slightly in the short term. In terms of functional footwear categories, sales of high-end sports shoes such as TPU have increased, and the expansion of large incremental customers has begun to show results, and the category has achieved relatively rapid growth; the company's TPU share in domestic brands such as Anta and Tep has increased, while actively marketing and promoting to other domestic and foreign brands such as Nike and Decathlon, with good gross margin.
Furthermore, the automotive interior and electronics categories showed a good growth trend. On the side of Amway Vietnam, the company is actively promoting Nike Laboratory certification and is expected to form a substantial order in September or 24Q4. Currently, Amway Vietnam produces about 0.2-0.3 million meters per month, and has not yet reached the break-even point. The company is making every effort to develop the market, improve capacity utilization, and strive to reduce losses throughout 2024 compared to the previous year.
Maintain a “Highly Recommended” investment rating. The company's revenue for 2024-2026 is estimated to be 2.5, 2.96, and 3.33 billion yuan, respectively, and net profit due to mother is 0.197, 0.256, and 0.319 billion yuan, respectively. The PE corresponding to the current stock price is 16.4, 12.6, and 10.1 times, respectively, maintaining a “highly recommended” rating.
Risk warning: Fluctuations in raw material prices and natural gas prices, exchange rate fluctuations, and payment risks of trust products.