Key points of investment
Incident: The company disclosed the 2024H1 performance forecast. The company expects 24H1 to achieve net profit of 0.305-0.325 billion yuan, a year-on-year increase of 87.06%-99.32% (the center was 0.315 billion yuan, +93.2% year over year); to achieve deducted non-net profit of 0.3-0.32 billion yuan, a year-on-year increase of 81.64%-93.75% (the center was 0.31 billion yuan, +87.7% year over year).
The Q2 performance greatly exceeded expectations, judging that it was mainly due to the impressive sales performance of major customers and the release of scale effects. Looking at Q2 alone, the company achieved net profit of 0.198-0.218 billion yuan, +79.7%-97.9% YoY (core 0.208 billion yuan, +88.8% YoY); realized deducted non-net profit of 0.191-0.211 billion yuan, +67.8%-85.3% YoY (core 0.201 billion yuan, year-on-year +76.
5%). We judge that the company's performance exceeds expectations mainly from: 1) Stanley, a major core customer, maintains high popularity in the US market, and its ability to continuously create explosives has been verified; 2) as the company's manufacturing capacity increases and order size increases, the scale effect continues to be released, and the superimposed exchange rate is relatively stable, and profitability is expected to remain high.
Production capacity bottlenecks are expected to ease in the second half of the year, and Vietnam's layout effectively mitigates risks. According to the 2023 annual report, the company's production base project with an annual output of 10 million stainless steel vacuum thermos cups was put into operation this year. At the same time, the first phase of the company's Vietnam plant (with an annual output of 13.5 million units) has been completed, which is expected to contribute incremental production capacity in the second half of the year. At the same time, the Vietnamese factory can effectively meet the diversified needs of customers in the supply chain, build a more stable supply capacity, further deepen the cohesion of cooperation with major customers, and the company's share of large customers is expected to further increase.
Investment advice: Major customer Stanley continues to be popular, and its ability to continuously create explosive products has been verified; at the same time, the Iceflow series and non-US market expansion provided the impetus for subsequent growth. The company's order source is stable, and as the competitiveness of the Vietnamese factory is further improved, the share is expected to continue to grow. According to the revised profit forecast in the interim report, net profit for 2024-2026 is estimated to be 0.7, 0.86, and 0.99 billion yuan (previous values were 0.59, 0.74, and 0.88 billion yuan), corresponding to PE11, 9, and 8X, maintaining the “buy” rating.
Risk warning: demand falls short of expectations, increased market competition, fluctuating raw material prices, capacity investment and anticipated risks.