Event: The company released its 2024 semi-annual report. In the first half of 2024, the company achieved operating income of 1.649 billion yuan, a year-on-year increase of 5.6%, and realized net profit to mother of 0.242 billion yuan, an increase of 12.87% over the previous year; deducted non-net profit of 0.23 billion yuan, an increase of 11.76% over the previous year.

Operating efficiency has been steadily improving, and net interest rates have been steady, moderate and positive. 2024H1's gross margin was 28.87%, a year-on-year decrease of 3.08pct. Sales, management, and R&D expenses were 1.88%/4.61%/4.43%, respectively, with changes of -4.01/-0.13/0.01pct, respectively. Net profit margin was 14.68%, up 0.91 pct year over year.

New orders reversed the downward trend, and major breakthroughs were made in the expansion of new industries. In the first half of 2024, the company added orders of 1.065 billion yuan, reversing the downward trend and increasing 45.29% month-on-month. Among them, in addition to traditional industries such as new energy, tobacco, and petrochemicals, other potential industries added 0.34 billion yuan in orders, 20 times the same period last year. Overseas Hungarian Sun Company and Singapore Sun Company are developing smoothly. As of the end of the first half of the year, the company had unconfirmed revenue orders of 3.572 billion yuan.

The equipment renewal policy is expected to boost the prosperity of the smart logistics industry. Seven departments including the Ministry of Industry and Information Technology jointly issued the “Implementation Plan to Promote Equipment Renewal in the Industrial Sector”, which clearly states that by 2027, the scale of investment in industrial equipment will increase by more than 25% compared to 2023, and proposed “promoting the upgrading of general intelligent manufacturing equipment such as CNC machine tools and basic manufacturing equipment, additive manufacturing equipment, industrial robots, industrial control equipment, intelligent logistics equipment, and sensing and inspection equipment.” A series of policy support for the smart logistics and intelligent manufacturing industry is expected to stimulate a climax in the construction of smart logistics systems and intelligent manufacturing systems.

Management acquisitions smoothed out the company's equity relationship. On July 31, 2024, Shao Jianwei, the controlling shareholder and actual controller of the company, signed a share transfer agreement and a property share transfer agreement. After the transfer, Shao Jianwei no longer holds any interests in the listed company, and the controlling shareholder and actual controller of the company will change.

Investment advice: The company is expected to achieve revenue of 3.142/3.436/3.959 billion yuan in 2024-2026, achieve net profit to mother of 0.442/0.52/0.628 billion yuan, and maintain a “buy” rating.

Risk warning: Downward macroeconomic pressure, new industry expansion falls short of expectations, and market competition intensifies.