Description of the event
The company released its 2024 semi-annual report. In the first half of the year, it achieved revenue of 0.624 billion yuan, an increase of 11.48% year on year; realized net profit due to mother 0.056 billion yuan, an increase of 6.28% year on year; realized net profit after deduction of 0.051 billion yuan, an increase of 27.18% year on year; and basic earnings per share was 0.10 yuan/share.
Incident reviews
The company's performance is growing steadily. In the first half of the year, the company made joint efforts in segments such as high-strength and high-conductivity copper alloy materials and products, medium and high voltage electrical contact materials and products, high-performance metal chrome powder, CT and DR ball tube components, optical module chip bases/shells, and liquid rocket engine thrust interior walls, and achieved both revenue and profit growth. Looking at a single quarter, the company achieved revenue of 0.337 billion yuan in Q2, up 9.21% year on year and 17.26% month on month; realized net profit of 31.37 million yuan, up 1.23% year on year and 27.73% month on month. The lower year-on-year increase was mainly due to differences in government subsidies.
The liquid rocket engine thrust chamber project and the optical module chip base project are progressing steadily. There were 126 global launches in the first half of the year, including 73 from the US and 30 from China; with frequent space launch activities, the demand for thrust interior walls is also increasing. The company added spinning technology and equipment for deformation processing, and simultaneously continued to build production capacity for finished products, improve the supply chain efficiency of key materials and components for rocket engines, and lay out the industrialization of a new generation of high-performance copper-chromium-niobium materials. In the first half of the year, the electroplating line for the company's optical module chip base/case products passed inspection and was officially put into operation, and the case products are being jointly verified with downstream customers. As demand for commercial space and optical modules expands and production capacity is released for the company's new construction projects, it is expected to continue to contribute to the company's performance.
Enhance R&D, innovation and industrialization capabilities, and accelerate overseas deployment. Investment in key R&D projects in the first half of the year was 32.4357 million yuan, an increase of 30.61% over the previous year to accelerate the industrialization of new industries and products. Revenue from new products such as liquid rocket engine thrust interior wall materials and products, optical module chip bases/cases, and semiconductor equipment components grew rapidly. At the same time, the company's international market business grew steadily, with export revenue of 0.173 billion yuan in the first half of the year, an increase of 27.79% over the previous year. The company continued to deepen business cooperation with international customers such as Siemens, Varex, and Schneider, and lay out overseas production capacity. The infrastructure construction of the Thai subsidiary is progressing smoothly.
Profit forecasting and valuation
Net profit for 2024-2026 is expected to be 1.27\ 1.69\ 0.23 billion yuan, EPS 0.18\ 0.23\ 0.32, respectively, corresponding to the company's closing price of 7.66 yuan on August 19, and PE of 43.7\ 33.0\ 24.2 for 2024-2026, respectively, giving a “buy-B” rating.
Risk warning
The risk of additional production capacity cannot be absorbed; the risk of uncertainty in developing a new product market; the risk of fluctuating raw material prices and hedging management.