Incident: The company released its 2024 semi-annual report, and performance was under pressure. In the first half of 2024, the company's revenue was 57.872 billion yuan, +8.46% year on year; net profit to mother was 0.123 billion yuan, or -58.35% year on year; net profit after deducting non-return to mother was 0.121 billion yuan, or -41.05% YoY. The company's performance is under pressure. The company achieved a total production of 0.9077 million tons of copper and copper alloy materials and 0.8575 million tons of foreign sales.

The company is actively expanding overseas business. Future plant construction in Thailand and expansion of production in Vietnam will bring new growth points to the company. In the first half of 2024, the company sold 0.0866 million tons of copper products overseas, an increase of 22.84% over the previous year. At the same time, in order to further meet the needs of international customers for the company's copper pipes, electromagnetic flat wire and other products, the company built a new production base in Thailand and expanded the scale of the production line at the Vietnam base. The steady growth of the above international business is conducive to enhancing the international competitiveness of the company's products and accelerating the upgrading of products and customers around the world.

The company's products continue to be optimized, and copper products for new energy vehicles have grown. In the first half of 2024, the company sold 0.0873 million tons of copper products used in the fields of new energy vehicles, photovoltaics, wind power, etc., with sales of copper products in the NEV sector increasing 12% year on year. The company continues to strengthen its application share and technical reserve advantages in emerging high-end markets to help enhance the company's long-term comprehensive profitability.

Investment advice: The company's product sales in the first half of the year fell short of expectations. We lowered the company's profit forecast, predicting that the company's 24-26 revenue was 119.625/131.127/145.937 billion yuan, respectively; net profit to mother was 0.533/0.716/0.88 billion yuan, respectively; corresponding to the 24-26 PE14.07/10.48/8.53 times, maintaining the company's “buy” rating.

Risk warning: copper processing production falls short of expectations; flat wire production falls short of expectations; competition in the NdFeB industry intensifies