Core views:
Incident: (1) The company released its 2024 semi-annual report. 24H1 achieved revenue of 0.26 billion yuan, a year-on-year decrease of 26.39%; realized net profit to mother of 40.72 million yuan, a year-on-year decrease of 46.56%.
(2) The company issued the “Notice on the 2024 Semi-Annual Profit Distribution Plan” and plans to distribute a cash dividend of 3 yuan (tax included) for every 10 shares to all shareholders.
According to estimates, 24Q2 achieved revenue of 0.184 billion yuan, a year-on-year decrease of 35.57%; realized net profit to mother of 35.91 million yuan, a year-on-year decrease of 52.2%. The company's revenue and profit declined year-on-year. The main reason was that the timing of exhibitions in Mexico and Brazil changed compared to the same period last year. Holding in the second half of the year had an impact on the company's revenue and profit structure and pace of release.
On the cost side, the company achieved a gross profit margin of 54.2% in 24H1, an increase of 2.4 pp over the previous year. The 24H1 expense ratio was 34.67%, up 8.61 pp year on year. Among them, the sales/management/R&D/finance expenses ratio was 25.6%/8.54%/2.65%/-2.12%, respectively, of which sales expenses increased 7.61 pp year over year.
Taken together, 24H1's net profit margin was 15.66%, down 5.90pp from the previous year.
The pace of holding exhibitions is slanted in the second half of the year, and profits are expected to increase. According to the company's official account, 24Q2 held 4 exhibitions (Osaka, Japan, Jakarta, Indonesia, Tokyo, Japan, and Dubai, UAE).
The company successfully held 6 exhibitions in the first half of the year. Nine exhibitions will be held as planned in the second half of the year. The overall pace of exhibition is skewed compared to the second half of '23, and profits are also expected to be concentrated in Q3 and Q4.
Deepen professional exhibition operations and expand the scale of implementation. According to the company's financial report, 24H1's professional exhibition has been expanded to 11 major industries (DeFU Defu Furniture Fair, CIE China International Education Equipment (Indonesia) Exhibition, and MTM Metal World Expo have been added to the original version), and the service model of the innovative exhibition has been upgraded simultaneously to ensure the effectiveness of exhibition visits and exchanges, and effectively improve the efficiency of exhibition transactions.
Profit forecasting and investment advice. The company is expected to achieve net profit of 0.236, 0.323, and 0.413 billion yuan respectively in 24-26, with year-on-year growth rates of 25.4%, 36.8%, and 27.9%, respectively. Referring to comparable companies, a PE valuation of 22 times in 24 years is given, corresponding to a reasonable value of 22.63 yuan/share, maintaining a “buy” rating.
Risk warning. Macroeconomic fluctuations; recurrent epidemics; low expectations for market expansion; geopolitical risks.
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