The company released 202 4H1 performance report:

H1: Revenue of 10.965 billion (+9.84%), net of 0.941 billion (+6.81%), net of 0.923 billion (+7.62%);

Q2: Revenue of 5.586 billion (+11.29%), net of 0.471 billion (+6.40%), net of 0.462 billion (+7.18%);

Revenue surpassed market expectations.

Revenue analysis: Q2 revenue that exceeded expectations came from the export segment

We expect domestic sales in Q2 to be about 3.517 billion, up 1% year on year. The growth rate is superior to that of the industry, due to the increase in the share of dominant categories;

We expect export sales in Q2 to be about 2.069 billion, an increase of 35% over the previous year. This is due to overseas customers leaving inventory during the same period, and there was a high increase in overseas orders under a low base. The 24-year related transactions guide 6.2 billion +4.5%. Split H1/H2 is expected to be at 3.2 billion/3 billion, respectively, and 23H2's export revenue is 3.7 billion. We expect the export center to improve throughout the year.

Profit analysis: Q2 gross margin is expected to be under pressure

Q2 net profit margin 8.43%, -0.37pct yoy, -0.30pct month-on-month. It is expected that gross margin will be damaged mainly due to weak consumption. It is expected that the company's future focus will be on improving cost control+product and structural innovation to balance rates.

Investment advice: The company is a stable target in a weak market environment

Our point of view:

Q2 Against the backdrop of weak domestic sales, it is no longer easy for the company to achieve flat domestic sales, high growth in export sales, and steady profits. We expect the export center to grow at +5% in the future. Furthermore, the company is preparing to go overseas with the Supor brand to differentiate itself from SEB. The company's dividend is expected to maintain 50-80%, and 80% corresponds to a dividend rate of 5.1%.

Profit forecast: We raised our previous 24-25 revenue forecast and added a 26-year forecast. We expect the company's revenue for 2024-2026 to 229 (previous value 226) /244 (previous value 239) /25.7 billion yuan, +7.5% (previous value +6.2%)/+6.4% (previous value +5.7%)/+5.3%, to the mother 23.9 (previous value 23.9) /2.8 billion yuan, YoY +9.5% (previous value 9.5%)/+8.7 billion yuan (previous value: previous value: 9.5%)/+8.7 billion yuan (previous value) Value 8.9%)/+7.7%; current market capitalization of 37.2 billion corresponds to PE16/14/13x, maintaining a “buy” rating.

Risk warning:

Industry sentiment fluctuates, and industry competition intensifies.