2024Q2's profitability continued its excellent performance, with outstanding refined operation capabilities. It maintained the “Buy” rating company's 2024H1 performance report. 2024H1 revenue was 11.47 billion yuan (+24.5% year over year, same below), with volume increase of 18.25%/price increase 5.3%, net profit attributable to mother of 1.878 billion yuan (+29%), net profit due to non-parent net profit of 1.84 billion yuan (+28.4%), net profit to mother of 16.37% (+0.6pct). On a quarterly basis, 2024Q2 revenue/net profit to mother was 6.71/1.09 billion yuan, respectively, +21%/+16.3%. The 2024Q2 performance is in line with expectations. We maintain our profit forecast. We expect net profit to be 3.86/4.56/5.3 billion yuan for 2024-2026, corresponding EPS is 3.3/3.9/4.5 yuan, and the PE corresponding to the current stock price is 17.9/15.2/13.0 times, maintaining a “buy” rating.
2024Q2's revenue grew steadily, with significant volume growth, and the unit price steadily increased in line with changes in the customer structure. 2024Q1/Q2 sales volume was 0.046/0.062 billion, +18.17% year over year. The estimated unit price of RMB was 103.6/108.2 yuan, or +10%/+2.3% year over year. In terms of volume, with the continuous promotion of new customers and a steady increase in the share of major customers, the company's sneaker sales grew steadily. At the same time, the new factories in Junhong, Vietnam and Indonesia were put into operation in 2024Q1, and production capacity is expected to be released steadily. In addition, the company's production capacity reserves are sufficient. In terms of price, the 2024Q2 RMB exchange rate against the US dollar fluctuated less year on year. The unit price increased steadily with changes in the customer structure, and the share of revenue from new customers with high unit prices is expected to further increase to support the steady rise in unit prices.
The net interest rate due to 2024Q2 was basically stable month-on-month. The year-on-year decline was affected by the positive contribution of exchange earnings during the same period 2024H1 company's continuous optimization process. The gross margin of 2024Q2 is expected to decline slightly month-on-month. 2024Q1/Q2 net interest rates are 16.53%/16.26%, respectively. The net interest rate for 2024Q2 benefiting from continuous fee control is basically stable month-on-month, -1.29pct. It is mainly affected by the positive contribution of 2023Q2 exchange earnings to profit. There are still improvements.
Risk warning: Downstream customer orders fall short of expectations, production capacity climbing, and new plant construction fall short of expectations.