The company announced an increase in the mid-year report of 24. 24H1 is expected to achieve net profit of 0.37-0.45 billion yuan, a loss of 0.132 billion yuan for the same period last year; net profit without deduction of 0.17-0.25 billion yuan, and a loss of 0.096 billion yuan for the same period last year. Looking at a single quarter, Q2 net profit attributable to mother was 0.061-0.141 billion, with a median loss of 0.05 billion yuan in the same period last year; net profit not attributable to mother was 0.043-0.123 billion, with a median loss of 0.083 billion yuan, and a loss of 0.086 billion yuan for the same period last year. Based on the company's recent business situation, our review is as follows:
Stable profits were achieved in 24Q2 due to continued positive demand for consumer electronics and automotive electronics. According to the company's announcement, the consumer electronics and new energy market continued to recover in the first half of the year. Major international and domestic customers all mass-produced and delivered important new projects. 24H1 revenue increased by about 30% year-on-year, reaching a record high in the first half of the year. H2's non-recurring revenue mainly comes from the company's transfer of 30% of Guangdong Tianji Intelligent Systems Co., Ltd.'s shares and obtained an investment income of about 0.18 billion yuan. Looking at the Q2 quarter alone, the company's consumer electronics continued to grow, driven by a recovery in customer demand for new products and terminals. The new energy business continued at a high growth rate. The overall revenue growth rate is expected to be around 30% year-on-year. The gross margin and net margin are also expected to improve, benefiting from increased utilization rates and improved internal management quality and efficiency.
Looking ahead to 24/25, the improvement of the consumer electronics and new energy business plus optimization of management capabilities is expected to drive the company to release profit flexibility. In the short term, entering the peak season for traditional consumer electronics and automobiles in Q3, the company's order demand will continue to improve, leading to an increase in the operating rate. The introduction of new material models for A customers will bring new volume, the operating rate of the new energy business will remain steady and upward, and the profitability of Q3 is expected to be further improved. Looking at the consumer electronics business throughout the year, the company continues to “increase share+expand the category”, hoping to drive new volume. Android titanium alloy cases will continue to be released, and domestic Android customer demand will gradually pick up; in the new energy business, orders for structural parts from key leading manufacturers in the industry such as T customers and C customers will continue to be imported and released, and the capacity utilization rate continues to increase. In addition, the company has strengthened internal quality and efficiency, and strictly controlled expenses, and the company's overall profitability is expected to improve quarterly in 24/25.
Maintain an “overweight” investment rating. In the medium to long term, the company's A customer structural parts and small parts business continues to provide growth momentum. The titanium alloy trend drives demand from non-A customers, and the continuous release of orders from core customers in the new energy business drives an increase in operating rate, opening up room for the company's long-term growth. Considering that H1 is basically oriented towards positive trends, we recently forecast revenue of 16.47/19.27/22.16 billion for 24/25/26, net profit of 7.7/9.4/12.7, corresponding EPS of 0.57/0.69/0.94 yuan, corresponding to the current PE price of 22.8/18.7/13.7 times, maintaining an “increase in holdings” investment rating.
Risk warning: Industry demand falls short of expectations, competition among peers intensifies, raw material prices fluctuate, and capacity utilization falls short of expectations.
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