The staggered hosting of the exhibition affected the apparent performance of 2024H1. The high increase in contract liabilities enhanced the certainty of H2 booth sales 2024H1. The company's revenue was 0.26 billion yuan/yoy -26.4%, net profit due to mother 0.04 billion yuan/yoy -46.6%, and net profit of non-return mother 0.037 billions/yoy -50.2%. 2024Q2 revenue was 0.18 billion yuan/yoy -35.6%, and net profit to mother was 0.036 billion yuan/yoy -52.2%. The decline in performance was due to some exhibitions being held at the wrong time (2024H1 held 6 events in 4 countries and 2023H1 held 9 events in 8 countries). The 2023 contract debt accounts for about 75% of the contract amount, and about 50% in 2024. If the contract debt is equivalent to the contract amount, as of 2024H1, the contract amount is 0.333 billion yuan/yoy +48.3%. If calculated at 0.05 million yuan/booth, 0.012 million booths have been sold as of 2024H1. Considering the cancellation of exhibitions such as the 2024H2 India Exhibition and the German Exhibition, we lowered our profit forecast. We expect the company's 2024-2026 net profit to be 2.3/3.1/3.9 (previous value 2.8/3.8/4.66) billion yuan, yoy +23.6%/+33.5%/+24.7%, corresponding to EPS 1.01/1.35/1.69 yuan. The current stock price corresponding PE is 14.8/11.1/8.9 times. We are optimistic that the company's professional exhibition upgrade will drive a high increase in booth sales and maintain a “buy” rating.
Profitability remains stable, increasing cost investment to help the sales team build 2024H1 self-hosted exhibition revenue of 0.228 billion yuan/yoy -26.7%, gross profit margin 55.09% /yoy+4.4pct; 2024H1 company's overall gross profit margin 54.2% /yoy+2.4pct, net profit margin 17.6% /yoy-5.24pct, 2024Q2 gross profit margin 54.1% /yoy+3.83pct, net profit margin 23.1% /yoy-5.38pct. Expense rate: 2024H1 sales/management/R&D/finance expense ratio 25.6%/8.5%/2.6%/-2.1%, yoy+7.61pct/+1.49pct/+0.23pct/-0.72pct. The company increased the cost to supplement the sales team to cover more regions and help build professional exhibitions.
The cooperative exhibition + establishment of a subsidiary showed initial results in the localized operation, and the AI+ digital optimization upgrade VIP customer service professional exhibition upgrade progressed in an orderly manner: 2024H1AFF exhibition revenue yoy +102%, and net profit yoy +76%.
China Textile Advertising 2024H1 achieved revenue of 40.755 million yuan and net profit of 10.319 million yuan. The theme of the 2024H1 professional exhibition has been expanded to 11 major industries, and the exhibition service model has been upgraded according to industry categories. The subsidiary's localized operation has begun to show results: the company's Indonesian subsidiary accurately invited buyers. The number of pre-registered buyers before the 6th (March) Indonesian exhibition exceeded 0.045 million, while the 7th (held in June) exceeded 0.073 million. The entire exhibition period was extended from 3 days to 4 days, making it the only BTB professional exhibition with a 4-day exhibition period in Indonesia. AI+ data optimizes and upgrades VIP exhibitor service processes and models: The overall repurchase rate of VIP customers in 2023 reached 35%, the average sales of 2024H1VIP customers increased 38% compared to 2023H2, while the ratio of independent VIP companies in the 2024H1 exhibition to repurchase exhibition projects in the second half of the year was nearly 60%.
Risk warning: international tension, macroeconomic fluctuations, booth sales falling short of expectations, etc.
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