Revenue continues to grow steadily, and mid-term dividends enhance investment attractiveness
24H1 achieved revenue of 2.343 billion, +4.73% year on year, net profit of 0.34 billion yuan year on year, minus non-net profit 0.34 billion, -0.37% year on year, of which Q2 achieved revenue of 1.346 billion in a single quarter, +0.41% year over year, and net profit to mother of 0.186 billion yuan, or -41.89% year on year. Net profit attributable to mother is mainly due to a decrease in investment income and an increase in expense ratios this year. The 24H1 cash dividend was 0.157 billion, and the dividend ratio was 46%. Considering the strong downward pressure on real estate, we lowered the company's performance expectations. The company's net profit for 24-26 is 1.47, 1.62, and 1.82 billion yuan (previous values of 1.58, 1.78, 2.01 billion yuan), corresponding to PE of 14.1, 12.8, and 11.4 times, maintaining the “buy” rating.
PPR gross margin is still rising, and raw material prices are generally stable
By business, PPR, PE, and PVC series products achieved revenue of 1.073, 0.474, and 0.303 billion yuan, respectively. The gross margins of the above businesses were 59.11%, 29.73%, and 20.99%, respectively, with year-on-year changes of +2.03pct, +0.69pct, and -0.94pct. The average price of PVC, HDPE, and PPR raw materials for 24H1 pipes nationwide was 5917, 8666, and 8849 yuan/ton, respectively, -3.75%, +1.91%, and +0.81% year-on-year. Since 24Q3, PVC, HDPE, and PPR prices have been -1.66%, +1.06%, and +1.83% year-on-year respectively, and the overall raw material prices have remained stable.
The “concentric circle” strategy accelerated, and overseas business achieved rapid growth. The company accelerated the “concentric circle” strategy and actively promoted market expansion for other products such as waterproof and water purification. Other products such as 24H1 waterproof achieved revenue of 0.463 billion yuan, +45.30% over the same period last year. The revenue share increased slightly by 5.53 pct to 19.78%, and the gross margin was 31.16%, -2.00 pct year on year. Looking at the subregions, the East China region's revenue was 1.199 billion, up 5.66% year on year. Overseas business progressed steadily, and 24H1 overseas business revenue increased 27.39% year over year to 0.168 billion, accounting for 7.16% of total revenue. The company is based in the Thai market through the Thai Industrial Park and continues to expand the surrounding market. Through continuous team integration, Singapore Jetstream optimizes its business structure and gradually improves its operating quality.
The sales expense ratio increased year on year, and the return on investment decreased year over year
24H1 gross margin was 42.1%, up 0.95pct year on year, and Q2 gross margin fell 1.25pct to 42.58% in a single quarter. The cost rate for the 24H1 period was 24.20%, up 2.53 pct year on year, and the sales/management/R&D/finance expenses rates were 15.22%, 6.78%, 3.23%, and -1.04%, respectively, +2.80pct, -0.25pct, -0.15pct, and +0.14pct, respectively. Asset and credit impairment losses were 0.007 billion, an increase of 0.006 billion over the same period last year, and investment income was -0.016 billion, a year-on-year decrease of 0.16 billion. Under the combined influence, the company's net interest rate was 14.71%, a year-on-year decrease of 7.80pct. The net CFO of 24H1 was 0.292 billion, with a year-on-year decrease of 0.115 billion in inflows. The receivables and payout ratios were 113.60% and 104.50%, respectively, -5.92 pct and -1.19 pct, respectively. Accounts receivable increased 0.059 billion compared to the end of '23.
Risk warning: Real estate is under strong downward pressure; repayment risk; raw material costs fluctuate greatly.