2）省内收入增速领先。2024H1，公司省内、省外收入分别为13.49、3.76 亿元，同比+16.84%、+7.79%，24Q2 收入分别同比+8.30%、+1.10%，省内结构升级和市占率提升逻辑不变，持续保持较快增长。occurrences
The company announces 2024 mid-year report. With 2024H1, the company achieved total revenue of 1.754 billion yuan (+15.17%), net profit due to mother 0.295 billion yuan (+15.96%), and net profit of non-return to mother 0.302 billion yuan (+19.08%). With 2024Q2, the company achieved total revenue of 0.678 billion yuan (+7.73%), net profit attributable to mother 0.074 billion yuan (+1.88%), and net profit not attributable to mother 0.08 billion yuan (+10.56%).
Revenue growth in the province led the way. At the end of H1, the number of distributors outside the province was +30.34% 1) H1 products over 300 yuan were +44.71% year-on-year. 2024H1, the company's revenue for products above 300 yuan, 100-300 yuan, and below 100 yuan was 0.313, 0.89, and 0.522 billion yuan, respectively, +44.71%, +14.97%, and +1.77% year-on-year, while 24Q2 revenue was +7.06%, +2.65%, and +13.32%, respectively.
2) The province's revenue growth rate is leading. In 2024H1, the company's revenue within the province and outside the province was 1.349 and 0.376 billion yuan respectively, +16.84% and +7.79%. 24Q2 revenue was +8.30% and +1.10%, respectively. The logic of structural upgrading and market share increase within the province remained unchanged, and continued to grow rapidly.
3) The number of distributors outside the province has increased rapidly, and nationalization is steadily expanding. At the end of 24H1, the number of dealers in the province and outside the province was 286 and 739, respectively, +18.67% and +30.34%, a net increase of 14 and 147 compared to the beginning of the year; we estimate that the average size of 24H1's dealers in and outside the province was 4.7152 and 0.5085 million yuan, respectively.
4) Distribution revenue is growing steadily. 2024H1, the company's distribution, direct sales and online revenue were 1.641, 0.04, and 0.044 billion yuan, respectively, +15.27%, -15.96%, and +36.51% year-on-year, while 24Q2 revenue was +9.34%, -52.86%, and -0.67%, respectively.
Gross margin benefits from structural optimization and improvement. External donations and deferred income tax have a short-term impact on Q2 profit margin 1) Product structure continues to be optimized, and gross margin has increased. 24H1's gross margin was 65.12%, +1.36pct year on year, 24Q2 gross margin was 64.67%, year-on-year +2.63pct, mainly due to continuous optimization of the product structure. In 24H1, the company's net interest rate to mother was 16.82%, +0.12pct year on year, mainly due to increased gross margin and increased government subsidies; 24Q2 was 10.90%, -0.63pct year on year, mainly due to increased expenses, increased foreign donations, and income tax impacts.
2) H1 four fees total +0.01pct year over year, Q2 +0.55pct year over year. In 24H1, the company's sales, management, R&D, and financial expense ratios were 19.16%, 9.70%, 1.32%, and -0.71%, respectively, -0.20, +0.72, -0.49, and -0.01pct. The increase in the management cost ratio was mainly due to the increase in employee remuneration and social insurance premiums; in 24Q2, the four fees were 21.03%, 12.54%, 2.12%, and -0.88%, respectively, -0.38pct.
3) Foreign donations and deferred income taxes affect Q2 profit margins in the short term. 24H1's other revenue/revenue +0.72pct to 0.89% year over year, 24Q2 other revenue/revenue +1.71pct to 1.94% year over year, mainly due to an increase in government subsidies; 24H1 company's non-operating expenses/revenue +1.07pct to 1.19% year over year, and 24Q2 non-operating expenses/revenue +2.52pct to 2.73% year over year, mainly due to an increase in external donation expenses; 24H1 income tax/revenue +0.88pct yoy, 24Q2 +2.58pct The impact of deferred income tax.
The company's basic market in the province is stable, and nationalization is accelerating
1) Two-wheel drive, continuously increasing the market share in the province. The company implements in-depth operations under brand leadership in the province. BC collaborates to develop major customer resources, increase growth market development through accurate operation in one county, one policy, promote product structure upgrading, and continuously increase market share in the province.
2) Accelerate nationalization and layout around Gansu+East China+North China markets. While consolidating the base market in Gansu Province, the company is actively expanding the northwest market, developing new East China and North China markets, and boosting the Internet market.
Since 2024, the company has adopted a focused strategy in markets outside the province, concentrating resources on key breakthroughs; and replicating the province's experience to promote user projects in Shaanxi. BC will work together to expand resources for major customers, which is expected to drive rapid growth outside the province.
3) There is room for cost ratio optimization, and profit margin is expected to increase. The company is currently in the expansion stage, and the upfront cost investment is high. As the volume of revenue from outside the province gradually increases, there is room for optimization of the company's expense ratio, which is expected to drive the company's profit margin upward.
Investment advice
We expect the company's net profit for 2024-2026 to be 0.401/0.486/0.586 billion yuan, respectively, with a growth rate of 21.78%/21.37%/20.65%, corresponding to PE 23/19/16X (market value 9.2 billion yuan) on August 19, respectively, maintaining the “gain” rating.
Risk warning
Expansion outside the province falls short of expectations, product structure upgrades fall short of expectations, and risks of excessive market competition.
