The company announced its 2024 mid-year report, with steady growth in performance. 2024H1 achieved revenue of 0.32 billion yuan +32% year over year, and net profit to mother of 0.041 billion yuan +52% year over year.
2024H1: Steady growth in performance, impressive growth in the high-end consumer electronics business. The company's 2024H1 performance grew steadily and profit margins increased; 2024Q2 achieved revenue of 0.19 billion yuan +24% year over year, net profit of 0.029 billion yuan +21% year over month, +150% month on month; 2024H1 achieved a gross sales margin of 50.1%, up 1.1 pct year on year, and net sales margin increased 2.1 pct year on year. The company targets high-end consumer electronics and passenger cars. Through “interactive” independent research and “customized flexible manufacturing” models, the company provides customers with global new functional coating materials with systematic solutions in multiple categories such as coatings, inks, and adhesives. The company achieved revenue of 0.27 billion yuan/0.05 billion yuan in 2024H1 high-end consumer electronics sector/passenger car sector respectively; in the high-end consumer electronics sector, mobile phones and related accessories achieved revenue of 0.14 billion yuan +33% YoY, and wearable devices achieved revenue of 0.08 billion yuan +77% YoY.
2024H2 outlook: The 3C renewal cycle and the volume of the automotive business are worth looking forward to. (1) Global smartphones are showing signs of recovery: According to IDC, global smartphone shipments increased 6.5% year-on-year to 0.285 billion in the second quarter of 2024, and have been growing for four consecutive quarters. (2) AI may bring about a wave of mobile phone switching:
According to IDC forecasts, global shipments of next-generation AI phones will reach 0.17 billion units in 2024, accounting for 15% of total smartphone shipments. The share of AI phones in the Chinese market will also grow rapidly, accounting for more than 50% by 2027. (3) The laptop market will enter a renewal cycle: Since the fourth quarter of 2023, PC shipments have maintained positive growth for three consecutive quarters; the laptop market has entered a strong renewal cycle in 2024 and 2025, and sales are expected to jump to a new peak of 0.2431 billion units in 2025. (4) The wearable device market continues to heat up: China's wearable device market shipped 33.67 million units in the first quarter of 2024, up 36.2% year on year; global wearable device shipments are expected to reach 0.5597 billion units in 2024, an increase of 10.5%. (5) Business growth in the automotive sector can be expected: Relying on the technical advantages and brand influence accumulated in the high-end consumer electronics field, the company achieved dual breakthroughs in technology and market through differentiated competitive strategies, and entered the supply chain system of well-known manufacturers including North American company T and BYD.
Maintain an “Overweight” rating. Revenue from 2024 to 2026 is expected to be 0.75/0.97/1.26 billion yuan, up 27%/29%/30% year on year, and net profit to mother is 0.11/0.14/0.19 billion yuan, up 33%/33%/36% year on year, corresponding PE 38/29/21 times.
Risk warning: new product development risk, downstream market demand fluctuation, company performance falling short of expectations, etc.