Non-net profit for the second quarter of 2024 increased 33.7% year over year. In the first half of 2024, the company achieved revenue of 2.3 billion yuan, a year-on-year increase of 25.6%, a year-on-year increase of 0.42 billion yuan, a year-on-year increase of 37.8%, a year-on-year increase of 33.7%, a gross profit margin of 41.8%, a year-on-year increase of 0.58pct, a year-on-year increase of 1.61 pct, a year-on-year increase of 1.05 pct. The sales/management/R&D/finance expense ratios were 8.0%/ 9.1%/3.6%/-0.6%, the total 4 fees decreased by 0.94 pct year on year, revenue for the second quarter was 1.5 billion yuan, up 32.2% year on year, net profit to mother was 0.338 billion yuan, up 36.2% year on year, net profit after non-return to mother was 0.325 billion yuan, up 31.1% year on year, gross profit margin increased by 43.9%, up 0.49 pct year on year, net interest rate due to mother 22.6%, up 0.66 pct year on year, net profit margin 21.8% year on year 0.19pct, sales/management/R&D/finance cost rates were 7.2%/7.0%/3.1%/-0.7%, respectively, and the total cost of 4 fees increased 0.41 pct year over year.

Dividends are distributed throughout the year to return shareholders' interests. The interim report plans to pay a dividend of 0.2 yuan/share, with a total dividend payout of 0.234 billion yuan, accounting for 56% of net profit for the first half of the year. When the 2023 annual report was published, the company paid a dividend of 0.526 billion yuan, accounting for 94% of the 2023 annual report's net profit to mother and a dividend ratio of 3.6%. The company's average dividend since 2010 was 77%. This announcement is the first mid-year cash dividend since the company went public, highlighting the company's active implementation of the concept of returning to shareholders.

Increase the added value of services and products, and continue to expand the quality clothing zipper and button business to achieve rapid growth.

The core competitiveness of the company's two main businesses in the first half of the year was further demonstrated. The growth in orders led to a further increase in capacity utilization. The zipper business achieved revenue of 1.26 billion yuan, a year-on-year increase of 24.0%, a year-on-year growth rate of 6.8% for the full year of 2023, a year-on-year increase of 0.34pct, and button revenue of 0.927 billion yuan in the first half of the year, an increase of 27.1% year-on-year, the growth rate in 2023. The company's gross margin was 42.1%, up 0.27pct year on year. The company's global economy In the process of recovery in international trade, we actively grasped the opportunities of changes in industry sentiment, with customer demand as the core, and achieved good operating performance. The company's orders increased. The capacity utilization rate increased to 70.73% in the first half of the year, an increase of 13.62 pct over the previous year. This is the highest level of capacity utilization since 2020, achieving a large-scale effect of operations.

Follow the internationalization strategy and global layout. The opening of a factory in Vietnam ensures the expansion of overseas markets. Vietnam's development situation. After the opening of the Vietnam Industrial Park, it is in early preparation stages such as customer factory inspection. Currently, the industrial park project progress has reached 85%. When the park begins to accept customer orders, it will provide a strong guarantee for the company's overseas market expansion.

Adhere to product development and “digital intelligence” manufacturing to enhance the company's core competitiveness. The company adheres to the pioneering role of R&D, strengthens its leading product advantage, is market-oriented and customer-centered, accelerates product process research and technological innovation, enhances the company's product strength and customer experience, and continues to promote “digital intelligence” upgrades, comprehensively promote the advanced level of manufacturing, accelerate the transformation to high-end intelligent manufacturing, and continuously improve the level of production management. Through continuous progress, the company is committed to forming the company's comprehensive competitive advantage in R&D and technology, intelligent manufacturing and scale, marketing and service, brand and quality, corporate culture and management team.

Risk warning. The risk of losing orders, the risk of production capacity expansion falling short of expectations, exchange rate fluctuations, and the risk of changes in international trade rules.

Profit forecasting and valuation. We expect revenue forecasts for 2024-2026 to be 4.5, 5.19, and 6.01 billion yuan, respectively, and net profit forecasts to mother of 0.646, 0.748, and 0.869 billion yuan respectively. The company will be given 20-25X PE in 2024, corresponding to a reasonable value range of 11.06-13.82 yuan, maintaining the “superior to the market” rating.