Non-net profit after 2024Q2 increased 23.4% year over year. With 2024H1, the company achieved revenue of 0.414 billion yuan, up 12.0% year on year; realized net profit of 0.128 billion yuan, up 17.4% year on year; realized deducted non-net profit of 0.127 billion yuan, up 22.7% year on year; with 2024Q2, the company achieved revenue of 0.223 billion yuan, up 11.7% year on year; realized net profit to mother of 65.98 million yuan, up 14.7% year on year; realized net profit of 65.9 million yuan year on year Million yuan, up 23.4% year over year. At 24H1, the company continued to work closely around the industrial chain, continuously deepening technological innovation, making every effort to expand the market, improving management efficiency, speeding up the construction process of fund-raising investment projects, taking more measures to reduce costs and increase efficiency, and exploiting potential internally, promoting continuous improvement in business quality and efficiency, and achieving steady growth in business performance.

Strengthen collaboration between schools and enterprises to enhance their ability to innovate. 2024H1, the company made new breakthroughs in cultivating high-level talents and building a platform for scientific research and innovation, and was approved to establish a national postdoctoral research workstation. The company will use this as an opportunity to strengthen in-depth cooperation with key universities and research institutes at home and abroad, and carry out forward-looking, strategic and innovative scientific research projects in multiple dimensions. At the same time, accelerate the introduction and incubation of high-level talents, give full play to the leading role of high-level talents in scientific research, and provide a continuous driving force for the company's high-quality development. As of June 30, 2024, the company has obtained a total of 75 domestic and foreign patents currently in force, including 59 invention patents and 16 utility models. 2024H1, the company added 3 new invention patents authorized in China and 1 in Korea; 9 Chinese utility model patents were authorized; 5 new invention patents were applied for; and 4 scientific research projects were approved.

Strengthen market promotion and enhance the influence of the industry. In April 2024, the company participated in the Chinaplas 2024 International Plastics Exhibition held at the Shanghai National Convention and Exhibition Center. Focusing on the theme of “Environmental Innovation, Green Future”, the company exhibited a series of environmentally friendly and efficient products and innovative solutions. While meeting market and customer needs in multiple dimensions, the company further demonstrated a good corporate image; deepened exchanges with partners from all sides to explore the path of sustainable development of the industry and expand a wider new development space.

Dividend repurchases are dual-driven to protect shareholders' interests. The company effectively promotes the “improving quality, efficiency and valuing return” action plan, and strives to fulfill the responsibilities and obligations of listed companies through good performance, standardized corporate governance, and positive investor returns, give back the trust of investors, maintain the long-term stability of the company's stock price, and boost market confidence. On 24H1, the company implemented and completed the 2023 equity distribution, distributing a cash dividend of RMB 7.50 (tax included) for every 10 shares and a cash dividend of RMB 99.3623 million (tax included) to all shareholders, maintaining the consistency, rationality and stability of the cash dividend policy.

Projects under construction support the company's growth. As of April '24, the company had a nucleating agent production capacity of 0.0287 million tons, synthetic hydrotalcite production capacity of 0.0191 million tons, antioxidant production capacity 5800 tons, and NDO compound additive 9800 tons.

The company's nucleating agent production capacity is 0.0169 million tons, which is expected to be completed in 2024; synthetic hydrotalcite production capacity is 5,300 tons, which is expected to be completed in 2024. After the completion of the above project, the company's total production capacity will increase from 0.0634 million tons to 0.0856 million tons. By the end of June '24, the cumulative investment progress of the first phase of the Guangzhou Kecheng New Polymer Material Additives Construction Project was 52.84%, and it is expected to reach the scheduled state of use in September 2024.

Profit forecasting and investment ratings. We expect the company's net profit to be $0.262 billion, 0.314 billion, and 387 million yuan in 2024-2026. Referring to companies in the same industry, we believe that the reasonable valuation is 22-25 times that of 2024, and the corresponding reasonable value range is 42.68-48.50 yuan, maintaining the “superior to the market” rating. Risk warning:

Core competitiveness risk; risk of not being profitable; risk of a sharp decline in performance or loss.