Feirongda issued an announcement: 2024H1 achieved revenue of 2.169 billion yuan/yoy +22%, and achieved net profit of 0.057 billion yuan/yoy +1307% to mother.

Key points of investment

2024Q2 revenue and profit both improved significantly month-on-month

In 2024Q2, the company achieved revenue of 1.2 billion yuan/yoy +18% /QoQ +21%, net profit attributable to mother 0.033 billion yuan/yoy +13% /QoQ +39%, and realized net profit deducted from non-mother 0.029 billion yuan/yoy +20% /QoQ +41%. The company's 2024Q2 revenue and profit sides both improved significantly from month to month. 2024Q2's gross margin recovered to 19%, and net margin was 2.6%, both of which increased significantly from month to month.

More blossoms, and the performance of servers and consumer electronics is impressive

Consumer electronics sector: 2024Q2's global smartphone sales volume is 0.288 billion units/yoy +12%, and the PC market has recovered well, with 2024Q2 sales reaching 62.8 million units/yoy +3.4%; thanks to industry recovery, the company's share continues to increase, and the consumer electronics sector continues to improve. Communications sector: The company's market share in the communications sector has increased, production capacity has been released, gross margin has increased significantly, and profitability has increased year-on-year. The company's server-related business is developing smoothly. It has cooperated with customers to develop a variety of liquid cooling products and special radiators such as 3D-VC/VCE, and some products have been delivered in small batches.

Focus on heat dissipation, focus on major customers, and strengthen core competitiveness

Focusing on major customers such as Huawei, Sunshine Power, Meta, Microsoft, and Lenovo, the company focuses on core products such as heat dissipation and electromagnetic shielding, and is actively expanding in product categories and customers. Overall, all of the company's businesses have achieved a good competitive position and development trend in the market.

Profit forecasting

The company's net profit for 2024-2026 is estimated to be 0.231, 0.349, and 0.456 billion yuan, respectively, and EPS is 0.40, 0.60, and 0.79 yuan respectively. The current stock price corresponds to PE of 38, 25, and 19 times, respectively. Based on the company's continuous strengthening of its core competitiveness and actively exploring new fields such as liquid cooling, it maintains a “buy” rating.

Risk warning

Demand falls short of expectations; raw material prices fluctuate; cost control falls short of expectations; new customer development falls short of expectations.