24H1 revenue/net profit to mother was +0.3%/+16.0%, maintaining the “increase” of Ruitai Technology's 2024 semi-annual report, achieving cumulative revenue of 2.242 billion yuan (yoy +0.28%) in the first half of the year, net profit to mother 37.473 million yuan (yoy +16.04%), deducting non-return net profit of 33.2094 million yuan (yoy +60.65%). Of these, 24Q2 achieved revenue of 1.106 billion yuan (yoy -5.41%, qoq -2.66%) and net profit of 15.0523 million yuan (yoy +47.87%, qoq -32.86%). We maintain the company's 2024-2026 EPS forecast at 0.35/0.39/0.43 yuan, respectively. Comparable to the 24-year Wind, the average PE was expected to be 9.7 times. Considering that the company is a leading refractory material for glass kilns, the central enterprise's background support gave the company 25 x PE for 24 years, maintained a target price of 8.70 yuan, and maintained a “gain”.
24H1 refractories revenue for glass kilns grew steadily, with a slight year-on-year decline. 24H1 achieved revenue of 0.329/0.453/1.374 billion yuan for glass kiln/ cement kiln/ steel refractory materials respectively, +23.47%/-6.25%/+1.15% year-on-year. Revenue from refractory materials for glass kilns and steel maintained positive growth. Among them, revenue from refractory materials for glass kilns maintained steady growth, or partly due to glass companies' profit recovery in the previous year. 24H1's overall gross profit margin was 16.40%, -0.25pct. Among them, the gross margin of refractory materials for glass kiln/ cement kiln/ steel was 18.64%/25.54%/13.20%, +1.35/ -0.59/-0.68pct; 24Q2 comprehensive gross profit margin was 15.66%, -1.02/-1.47pct month-on-month.
24H1 Expenses are well managed, and cash flow is positive year over year
The cost rate for the 24H1 period was 12.19%, -0.89pct, of which the sales/management/R&D/finance ratio was 2.69%/4.84%/3.77%/0.89%, and -0.20pct/-0.55pct/-0.03pct/-0.11pct year-on-year.
24H1 net interest rate/net non-return interest rate 1.67%/1.48%, +0.23pct/+0.56pct year on year; 24Q2 was 1.36%/1.06%, +0.49/+0.53pct year on year, and -0.61/-0.83 pct month-on-month. 24H1 Company's balance ratio/interest-bearing debt ratio was 71.0%/26.3%, -2.7/-4.9pct year-on-year. 24H1's net operating cash flow was 0.068 billion yuan, of which 24Q2 was 0.12 billion yuan, of which 24Q2 was 0.12 billion yuan, +0.132 billion yuan year over year. Net operating cash flow was mainly corrected year on year due to an increase in sales repayments and a year-on-year decrease in accounts receivable.
Aggregate demand may continue to decline, and deep heritage and intelligent innovation help the company continue to lead the company's 2024 plan to achieve total revenue/profit of 4.8/0.19 billion yuan, +3.7%/+3.4% over the same period last year. Over the past 24 years, the driving role of the infrastructure sector in the building materials industry has recovered, and the industrial sector market has continued to grow, but the real estate market continues to decline, and overall demand in the building materials market is still weak. As a result, regional contract prices for refractory materials continued to shrink. We believe that the “stock game” between refractory companies may gradually intensify.
The company is a refractory company with a central enterprise background. It ranks among the top in the industry. It is in a leading position in terms of technical level, innovation ability, and brand influence, and is expected to maintain steady scale growth.
Risk warning: The steel/cement/glass industry is declining, costs have risen sharply, and the balance ratio continues to be high.