Description of the event
The company released its 2024 semi-annual report. 24H1 achieved revenue of 2.556 billion yuan, +10.14% year on year, realized net profit of 0.266 billion yuan, +4.51% year on year, net profit after deducting non-return to mother was 0.26 billion yuan, +5.77% year over year. Of these, 24Q2 achieved revenue of 1.457 billion yuan, +8.44% year-on-year, and net profit to mother of 0.17 billion yuan, or +3.38% year-on-year. The company's revenue performance is generally in line with expectations.
reviews
Wool spinning grew steadily, and cashmere was released quickly. Looking at 24H1 by business: 1) The worsted spinning business revenue was 1.479 billion yuan, +10.01% year on year, sales volume 9285 tons, +13.33% year on year, average price 0.1593 million yuan/ton, -2.9% year on year; 2) In terms of cashmere business, Ningxia Xinao had revenue of 0.533 billion yuan, +25.2% year on year, sales volume of 1029 tons, +39.01% year on year, with an average price of 0.5 millionyuan/ton, -10.0% Net profit of 33.55 million yuan was achieved, -16.6% year over year; British Duncan's revenue was 0.16 billion yuan, which was basically the same year on year, and net profit was 2.58 million yuan, showing a decline.
The wool spinning business drives up gross margins, and financial expense ratios drag down net interest rates. 24H1 gross margin was 20.84%, +0.50 pct year on year; 24Q2, gross margin was 21.55%, +0.42 pct year on year, and the gross margin of wool spinning was further increased; 24H1 sales rate, management rate, R&D rate, and financial rate were 1.68%/2.33%/0.97%, respectively, -0.06/+0.04/-0.02/+1.68 pct; 24Q2 sales rate/management rate/R&D rate/finance rate were 1.65%, respectively 2.41%, 2.32%, and 0.71% were -0.09/-0.10/+1.93 pct, respectively. Financial expense ratios increased due to interest expenses and exchange factors, and other indicators were generally stable. Overall, 24H1 net profit margin was -0.56pct to 10.41% yoy, of which 24Q2 net profit margin was -0.57pct yoy to 11.68%.
Profit forecast and investment suggestions: The company is steadily promoting production capacity investment, speeding up the global layout, and the subsidiary's production capacity in Vietnam is progressing according to the plan, and long-term growth is worry-free. We expect net profit for 24-26 to be 0.45 billion yuan/0.52 billion/ 0.59 billion yuan, respectively, and the corresponding PE is 10 times, 9 times /8 times, respectively, maintaining the “buy” rating.
Risk warning:
Terminal consumption is sluggish, gross prices are falling, cashmere business profit margins fall short of expectations, etc.