Incident: Huaqin Technology released its 2024 semi-annual performance forecast. The company expects to achieve operating income of 496.6608 million yuan in the first half of 2024, an increase of 114.7526 million yuan, an increase of 30.05% over the same period last year; realized net profit of 219.6417 million yuan, compared with the same period last year, an increase of 36.0441 million yuan, an increase of 19.63% over the previous year; and Compared with the same period last year, it will increase by 37.0854 million yuan, a year-on-year increase of 21.21%.
Comment:
The company is a leading domestic enterprise of special functional materials. The company is mainly engaged in R&D, production and sales of special functional materials, including stealth materials, camouflage materials and protective materials. The products are mainly used for stealth, camouflage of important ground military targets, and surface protection of various equipment components in China's major defense weapons and equipment such as aircraft, main battle tanks, ships, missiles, etc. The company also continues to develop business layout around the aero engine industry chain and advanced new materials industry, developing businesses or products such as aero engine parts processing, ceramic-based composites for aero engines, and acoustic metamaterials.
The strategic layout of the company's business was initially formed. In the military field, based on stealth materials and camouflage materials, the company lays out intelligent processing and manufacturing of components, carbon fiber resin-based composites, ceramic-based composites, etc. in the aerospace field, especially in the aero engine field, and has gradually grown into a core supplier for China's aero engine industry. In the civilian sector, based on high-end new materials for civilian use, we will further develop a series of civilian products such as acoustic metamaterials, heavy anticorrosive materials, high-efficiency thermal resistance materials, electromagnetic shielding materials, etc., and vigorously expand their application in key national industrial fields, enrich the company's product sequence, strive to open up new market opportunities, and enhance the company's business scale and profitability.
The company's product line is rich in reserves. In terms of stealth materials, the company is progressing smoothly in broad temperature ranges, multi-spectral compatibility, multi-function, low-frequency stealth coating materials, and structural stealth composites. In terms of camouflage materials, materials for mobile equipment such as camouflage equipment are developing rapidly. In terms of protective materials, heat-resistant materials and heavy anticorrosive materials have been installed in some equipment. In terms of acoustic metamaterials, the acoustic metamaterials developed by Huaqin Optoacoustics have made business progress in the fields of industrial noise reduction, acoustic laboratories, power energy, wind tunnel laboratories, building sound absorption, rail transit, etc. In terms of ceramic-based composites, Shanghai Ruihuasheng has been set up, and the hidden ceramic-based composite project at the company headquarters has also been successfully carried out.
Profit forecast and investment rating: The company's revenue for 2024-2026 is estimated to be 1.224/1.619/2.107 billion yuan, respectively, and net profit to mother is 0.511/0.674/0.853 billion yuan, respectively. The company's special functional materials product category continues to expand, and profitability is expected to continue to improve, giving the company an “gain” rating.
Risk warning: the risk that downstream demand and orders fall short of expectations; the risk that new product development progress falls short of expectations; the risk that product prices will fall due to intense market competition; the risk that performance forecasts and valuation judgments fall short of expectations.