Revenue and profit grew steadily in the first half of '24, and the growth rate increased further in Q2. The company disclosed financial reports for the first half of '24:1) In the first half of the year, it achieved operating income of 5.967 billion yuan and net profit to mother of 2.493 billion yuan, up 8.17% and 11.74% year-on-year respectively; corresponding to diluted EPS of 0.17 yuan; realized net profit without deduction of 2.197 billion yuan, an increase of 11.43% year on year; 2) The company achieved revenue of 3.2388 billion yuan and net profit to mother of 1.453 billion yuan in a single quarter, up 10.0% year-on-year respectively , 12.6%, corresponding to diluted EPS of 0.10 yuan; revenue was further improved in the first quarter compared with the net profit growth rate due to mother; 3) The company plans to distribute cash of 1.00 yuan (tax included) to all shareholders for every 10 shares in mid-year 24, without implementing capital reserves to increase share capital or dividend shares.
Gross margin has increased steadily, and profitability has continued to improve. The company's gross margin reached 65% in the first half of the year, of which Q1 and Q2 were 61.7% and 68.0% respectively, up from the same period of the previous year (61.8% and 65.8% in the same period of 23, respectively); net interest rates reached 41%, of which Q1 and Q2 were 37.1% and 44.5% respectively, which increased compared with the same period of the previous year (36.8% and 43.5% for the same period of 23, respectively), which is a high level of recent years; showing strong operating leverage and good bargaining power in the industry chain.
The resource point advantage is stable, and we focus on the sinking market and overseas progress in the medium to long term. 1) On July 31, 2024, the company's lifestyle media network covered about 300 cities in China, the Hong Kong Special Administrative Region, and about 100 major cities in South Korea, Thailand, Singapore, Indonesia, Malaysia, Vietnam, India, and Japan. Among them, there are 1.097 million television media self-operated equipment (including about 0.156 million units of media equipment from overseas subsidiaries), about 1.549 million units of elevator poster media self-operated equipment (including about 0.019 million units of media equipment from overseas subsidiaries), 1,835 cinema media cooperative cinemas, and about 0.013 million cinemas.
About 0.084 million units of elevator television media equipment joined, and there were about 0.403 million elevator poster media devices in participating companies, with a significant leading edge in media resources; 2) Building Media achieved revenue of 5.505 billion yuan in the first half of the year, an increase of 7.25% over the previous year. Consumer goods were still the main source of revenue and showed steady performance (revenue accounting for 59%, up 11.66% year on year). In addition, real estate, home, and transportation performance was good (up 26.23% and 16.04% year on year, respectively) Thanks to the Q1 box office The market picked up, and the cinema media achieved revenue of 0.454 billion yuan, an increase of 20.75% over the previous year. Focus on subsequent box office market performance.
Risk warning: macroeconomic fluctuations; increased competition; changes in the media environment due to technological progress, etc.
Investment advice: We maintain net profit to mother for 2024/25/26 at 5.722/6.587/6.976 billion yuan, corresponding to diluted EPS = 0.40/0.46/0.48 yuan, and the current stock price corresponds to PE = 15/13/12x. The company is the largest lifestyle media platform in China, with significant location advantages. AI technology is expected to improve the company's operational efficiency and maintain a “superior to the market” rating.