4~6 月国内PMI 分别为50.4、49.5、49.5，大多处于荣枯线以下，或预示行业Q2 需求情况平平。公司24Q2 收入实现同比16%、环比41%的快速增长，可能来源于刀具国产化率以及公司市占率的提升，上半年公司积极应对市场变化，通过技术创新、销售渠道完善、加强内部管理等多种方式推动各项业务平稳发展。产品矩阵不断完善，上半年新增3 项基体材料牌号，1项PVD 涂层材料以及2 项PVD 涂层工艺，2 项CVD 涂层工艺。加强国内市场开拓的同时，完善海外经销体系，上半年实现海外收入2305 万元，同比+43%。Interim profit growth resumed
Huarui Precision released its 2024 interim report. 24H1 achieved revenue of 0.41 billion yuan (yoy +15%), net profit to mother of 71.94 million yuan (yoy +15%), and deducted non-net profit of 70.86 million yuan (yoy +19.5%). Of these, 24Q2 achieved revenue of 0.24 billion yuan (yoy +16%, qoq +41%) and net profit to mother of 54.75 million yuan (yoy +43%, qoq +219%). Considering that downstream demand recovery during the year fell short of expectations, we lowered our profit forecast for 2024-25 and added a profit forecast for 2026. The company's net profit for 2024-2026 is estimated to be 2.1, 2.8 billion yuan, and 330 million yuan, respectively (down 22% and 12% from the previous values of 0.26 and 0.32 billion yuan in 2024-2025). Comparatively, the company Wind agreed to expect an average PE value of 35 times. Under the precautionary principle, the company was given 25 times PE in 24 years, with a target price of 83.25 yuan (previous value 108 yuan), maintaining a “buy” rating.
24Q2 revenue growth rate increased in a single quarter, possibly due to increased market share
Domestic PMIs from April to June were 50.4, 49.5, and 49.5, respectively. Most of them were below the boom and dry line, or indicate that the industry's demand situation in Q2 was flat. The company's 24Q2 revenue achieved rapid growth of 16% year-on-year and 41% month-on-month, probably due to the increase in the localization rate of tools and the company's market share. In the first half of the year, the company actively responded to market changes and promoted the steady development of various businesses through various methods such as technological innovation, sales channel improvement, and internal management. The product matrix was continuously improved. In the first half of the year, 3 substrate material grades, 1 PVD coating material, 2 PVD coating processes, and 2 CVD coating processes were added. While strengthening domestic market development, improving the overseas distribution system, we achieved overseas revenue of 23.05 million yuan in the first half of the year, +43% over the same period last year.
Expense control is good, and profitability has improved
The company achieved a gross profit margin of 46.4% and a net profit margin of 22.8% in a single quarter, +1.9 and +4.3pct, respectively. We estimate that the year-on-year increase in gross margin was mainly due to a decrease in the share of the low-profit full-tool business, while at the same time increasing the utilization rate of blade production capacity. Expense control was good. The sales, management, R&D, and finance expense ratios for the 24Q2 single quarter were -1.0, -1.3, -1.4, and +0.5pct, respectively. The increase in the financial expense ratio was mainly due to an increase in interest expenses on convertible bonds. The decrease in sales and management expenses was mainly due to a decrease in share payment expenses. At the same time, expenses for marketing, exhibitions, intermediary services, etc. were well controlled, and managers' remuneration declined. R&D expenses remained flat at +2.3% year-on-year in the first half of the year.
Risk warning: 1) The recovery in industry demand fell short of expectations; 2) the competitive pattern in the tool industry deteriorated beyond expectations; 3) The cost rate control situation fell short of expectations.
