The company released its 2024 semi-annual report
24Q2's revenue was 1.457 billion yuan, up 8.4%; net profit to mother was 0.17 billion yuan, up 3.4%; net profit after deducting non-return to mother was 0.166 billion yuan, up 5.4%; 24H1 revenue was 2.556 billion yuan, up 10.14%; net profit to mother was 0.266 billion yuan, up 4.5%; net profit from non-return to mother was 0.26 billion yuan, up 5.77%.
24H1's worsted yarn business revenue was 1.479 billion yuan, up 10.01%; sales volume was 9285 tons, up 13.33%; the Australian Wool Exchange Eastern Market Composite Index (Australian dollar) price was 1,142 Australian cents/kg on June 27, 2024, a decrease of about 6% from 1213 Australian dollars/kg on January 11, 2024; in this context, the company's worsted revenue grew by double digits, mainly due to the company coping with the price cycle through multiple scenarios, multiple grades and serialized product structures.
The subsidiary Xinao Cashmere 24H1 earned 0.53 billion yuan, an increase of 25.2%; self-operated sales increased 19.23% and 39.01% year-on-year respectively, of which sales increased to 1,029 tons;
Shinwa and 24H1 earned 0.88 billion yuan, -5% year-on-year; Duncan in the UK earned 0.16 billion yuan, which was basically the same as the previous year.
24H1's gross profit margin of 20.84% increased by 0.5 pct; net profit margin to mother was 10.4%, a decrease of about 0.6 pct.
Among them, 24H1 management expenses increased by 11.61%, mainly due to an increase in share payment fees; the increase in financial expenses (24H1 about 0.025 billion yuan, 23H1 about -0.016 billion yuan) was mainly due to an increase in interest on 24H1 bank loans and an increase in exchange losses due to exchange rate changes.
Continued growth in production capacity locks in future growth
The 0.015 million spindle equipment involved in the second phase of the company's “0.06 million spindle high-grade worsted eco-yarn project” has been put into operation; the subsidiary's “0.05 million spindle high-grade worsted ecological yarn textile dyeing and finishing project” in New Australia and Vietnam is progressing steadily according to the plan. The first phase of the 0.02 million spinning project is expected to be completed and put into production one after another. After the project is put into operation, it will help enhance the company's overall competitiveness and risk resistance level; the subsidiary Yinchuan, New Australia “0.02 million spun high quality worsted wool” The “(velvet) yarn construction project” is scheduled to be put into operation one after another in the second half of 2025.
Outdoor sports tracks drive diversification of wool application scenarios
In recent years, wool wear has spread to many scenes and emerging scenes, and outdoor sports performance is relatively good. Leading brands have a complicated and strict certification process for supplier selection, and only a few companies have the ability to enter the high-end market to participate in comprehensive competition. With rich industry experience, good market reputation and strong development and design capabilities, New Australia has become a designated yarn supplier for many high-quality brand customers. It has formed long-term and stable cooperative relationships with them, and customer resource barriers are deep.
Adjust profit forecasts and maintain buying ratings
Based on 24H1's performance, the net profit margin fell short of the same period in '23. We lowered our profit forecast. We estimated net profit for 24-26 to be 0.44 billion, 0.51 billion, and 0.59 billion (previous values were 0.47 billion, 0.54 billion, and 0.62 billion), respectively, and the corresponding EPS was 0.60, 0.69, and 0.80 yuan/share (previous values were 0.64, 0.74, and 0.85) yuan/share), PE is 11, 9, and 8X, respectively.
Risk warning: macroeconomic risk; wool price fluctuation risk; cashmere price fluctuation risk; exchange rate fluctuation risk; overseas investment risk, etc.