Core views:
Revenue growth was impressive, and profit remained flat month-on-month. The company announced its 2024 mid-year report. 2024H1 achieved operating income of 0.74 billion yuan (YoY +55.2%); net profit to mother of 97.1 million yuan (YoY +46.9%).
Gross profit margin 36.1% (YOY+4.2pct), net profit margin to mother 13.1% (YOY-0.7pct). The interim results were generally at the median level of the performance forecast. 2024Q2 achieved operating income of 0.41 billion yuan (YoY +77.5%); net profit to mother of 543.2 billion yuan (YoY +15.0%). Gross profit margin 33.3% (YOY+4.6pct), net profit margin to mother 13.2% (YOY-7.2pct). 24Q2 revenue growth was impressive. The main reasons: (1) overseas demand was relatively good; (2) the same period last year was affected by overseas inventory removal, and the revenue base was low. The main reasons for the increase in 2024Q2 gross margin: (1) According to the median calculation, the 24Q2 exchange rate of RMB against the US dollar depreciated by about 2-3% compared to last year; (2) the share of the company's high-value-added products and high-end brand products increased further, leading to an increase in gross margin. The 24Q2 net interest rate fell 7.2 pct year on year, mainly due to large fluctuations in financial expenses. Specifically, 23Q2 financial expenses were -51.57 million yuan, and 24Q2 was -7.47 million yuan. This was mainly affected by exchange earnings. The RMB depreciated significantly during the same period last year, leading to more exchange gains in financial expenses. On a month-on-month basis, the 24Q2 net interest rate was basically the same as 24Q1.
Air compressor revenue is growing faster than vacuum cleaners. By product, 2024H1 vacuum cleaner revenue is 0.38 billion yuan (YoY +38.5%), air compressor revenue is 0.25 billion yuan (YoY +72.4%), and spare parts and other revenue is 0.11 billion yuan (YoY +94.3%).
Profit forecasting and investment advice. The company mainly exports air compressors and vacuum cleaners. After the overseas inventory was completed, overseas demand improved significantly. The company mainly engaged in export business, benefiting from export recovery.
Based on this, we expect the year-on-year growth rate of the company's net profit to mother in 2024-26 to be 25.8%, 20.2%, and 18.8%, respectively. We will give 17xPE in 2024, corresponding to a reasonable value of 20.48 yuan/share, maintaining the “increase in holdings” rating.
Risk warning. Overseas demand is weakening, raw material prices are rising, exchange rates fluctuate greatly, and the US is imposing tariffs.