24H1 毛利率41.8%（同比+0.6pct），其中24Q2 毛利率43.9%（同比+0.5pct）。24H1期间费用率20.1%（同比-0.9pct），除了销售费用率略升0.12pct，管理/研发/财务费用率分别改善0.68pct/0.25pct/0.14pct，其中在财务费用项，利息净收入增加1653 万元，大于同期汇兑净收益减少1029 万元，缓解了上年同期汇兑收益高基数的压力。最终，24H1 归母净利率18.1%（+1.6pct)，其中24Q2 归母净利率22.6%（同比+0.7pct），但如果剔除当期汇兑损益因素，可比口径下单季归母净利率增幅实际更高。Key points of investment:
The company released its 2024 mid-year report, and both revenue and net profit exceeded expectations. 1) 24H1 revenue of 2.3 billion yuan (YoY +25.6%), net profit of 0.416 billion yuan (YoY +37.8%), of which 24Q2 single quarter revenue was 1.5 billion yuan (YoY +32.2%) and net profit to mother was 0.338 billion yuan (YoY +36.2%), all of which reached record highs. 2) 24H1 net operating cash flow of 0.39 billion yuan (+60% year over year) guarantees a current cash dividend of 0.2 yuan/share (tax included), and a cash dividend ratio of 56%.
Strong sales orders (increased capacity utilization) and production-side digital intelligent manufacturing (cost reduction and efficiency) are reflected in increased gross profit and cost improvements, which ultimately led to continued expansion of profitability. According to the interim report, the 24H1 capacity utilization rate was 70.7% (year-on-year +13.6pct), of which domestic production capacity was 75.5% (year-on-year +16.6pct) and overseas production capacity was 49.6% (year-on-year +4.9pct).
24H1 gross profit margin was 41.8% (YoY +0.6pct), of which 24Q2 gross profit margin was 43.9% (YoY +0.5pct). The cost rate for the 24H1 period was 20.1% (-0.9 pct year on year). Apart from a slight increase of 0.12 pct in the sales expense ratio, the management/R&D/finance cost ratio improved by 0.68 pct/0.25 pct/0.14 pct, respectively. Among them, in financial expenses, net interest income increased by 16.53 million yuan, which was greater than the decrease of 10.29 million yuan in net exchange earnings during the same period last year, relieving the pressure on the high exchange earnings base for the same period last year. In the end, 24H1 net interest rate to mother was 18.1% (+1.6pct), of which 24Q2 net interest rate was 22.6% (+0.7pct year over year), but if the current exchange profit and loss factor is excluded, the net interest rate increase in a single quarter is actually higher.
According to the interim report, there was overall high growth in all categories and domestic and foreign sales. 1) By product: 24H1 zipper revenue 1.26 billion yuan (YoY +24%), gross profit margin 42.9% (YoY +0.3pct); button revenue 0.93 billion yuan (YoY +27%), gross profit margin 42.1% (YoY +0.3pct); other apparel accessories 0.076 billion yuan (YoY +23%). 2) Market by market: 24H1 domestic revenue of 1.54 billion yuan (+24.8%), accounting for 67%, gross profit margin of 41.3% (+1.85pct); international revenue of 0.76 billion yuan (+27%), accounting for 33%, gross profit margin 42.9% (-2.05pct). Currently, the new base in Vietnam is in the initial climbing phase, which has dragged down the gross profit margin.
Internationalization has been further advanced in 24 years, and the overseas market space is vast, opening up the ceiling for growth. The company's second overseas industrial park, Vietnam base was put into operation in March '24, and customers visited the factory at the same time. We believe that thanks to a relatively mature level of advanced equipment, its subsequent business will climb faster than the previous base in Bangladesh, and it will also become a strong competitor for market share in Southeast Asia. According to the 2023 comprehensive report of its counterpart YKK, the sales volume of its FASNING business in the ASEAN market in 2022 was as high as 96.6 billion yen (equivalent to nearly 5 billion yuan), and Weixing Co., Ltd.'s overseas business growth space is quite broad.
Facing the world, national enterprises in the Chinese apparel accessories industry use internationalization to open up room for growth and maintain a “buy” rating. In view of the company's performance exceeding expectations in the first half of the year, we raised the revenue growth rate and gross profit margin of various accessories categories, so we raised our profit forecast. We expect net profit to be 0.7/0.81/0.93 billion yuan (originally 0.65/0.76/0.89 billion yuan) for 24-26, corresponding PE of 20/17/15 times. The high-quality business model should enjoy a high valuation and maintain a “buy” rating.
Risk warning: Global clothing consumer demand is sluggish; progress in international strategies falls short of expectations; raw material prices and exchange rates fluctuate.
