Description of the event

The company released its 2024 semi-annual report. In the first half of the year, the company achieved revenue of 0.942 billion yuan, an increase of 26.23% over the previous year; realized net profit due to mother 0.057 billion yuan, an increase of 35.00% over the previous year; realized net profit after deduction of 0.053 billion yuan, an increase of 63.35% over the previous year; and basic earnings per share of 0.72 yuan.

Incident reviews

Both revenue and profit increased in the first half of the year. The company continues to consolidate and develop its own core competitiveness, and domestic and foreign sales revenue have increased. Looking at a single quarter, Q2 achieved revenue of 0.462 billion yuan, a year-on-year increase of 27.91% and a decrease of 3.80%; realized net profit to mother of 26.12 million yuan, a decrease of 4.24% year-on-year and a decrease of 16.44% month-on-month; and basic earnings per share of 0.33 yuan.

Second-quarter results were slightly under pressure due to rising costs and sea freight prices. The first half of the year was affected by macroeconomic factors such as international political and geographical tension, trade frictions, etc., and overall global economic recovery was slow. Factors such as rising raw material prices and international shipping costs posed challenges to the company's product gross profit to a certain extent. The average prices of dicyclopentadiene, rubber oil, and SBS in the second quarter were 9231, 7827, and 14,187 yuan/ton respectively, up 9.20%, 1.70%, and 7.46%, respectively. Higher raw material costs put pressure on gross profit in the second quarter.

Continue to strengthen overseas professional team building and build a stable global industrial chain production base. The company expanded its experienced overseas professional team, and overseas sales revenue continued to grow. In the first half of the year, overseas revenue was 0.557 billion yuan, an increase of 32.10% over the previous year, accounting for 59.11% of total revenue. The gross margin of the company's domestic business in the first half of the year was 13.16%, up 1.23pct year on year; the gross margin of overseas business was 14.89%, up 1.63 pct year on year.

In addition, the company continues to promote global production capacity layout, steadily advance project construction progress, build a stable global supply chain production base, enhance customer confidence in supply chain security, stabilize the relationship between the company and customers, and enhance the company's ability to cope with the risk of international trade barriers.

Investment advice

The company's 2024-2026 EPS is expected to be 1.59\ 1.91\ 2.42, corresponding to the company's closing price of 25.03 yuan on August 19, and the 2024-2026 PE is 15.8\ 13.1\ 10.3, respectively, maintaining the “buy-B” rating.

Risk warning

Risk of project commissioning falling short of expectations; risk of fluctuating raw material prices; risk of overseas market expansion falling short of expectations, etc.