occurrences

On August 22, 2024, Real Madrid Technology released its 2024 semi-annual report: in the first half of 2024, the company achieved revenue of 1.109 billion yuan, +23.65% year over year; realized net profit of 0.191 billion yuan, +26.98% year over year; ROE was 6.73%, up 0.89 percentage points year on year. The gross profit margin on sales was 25.23%, up 2.10 percentage points year on year; the net profit margin was 17.20%, up 0.46 percentage points year on year.

Among them, 2024Q2 achieved revenue of 0.577 billion yuan, +24.18% year over month, +8.55% month on month; realized net profit of 0.103 billion yuan, +44.11% year on year, +16.93% month on month; ROE was 3.64%, up 0.87 percentage points year on year and 0.48 percentage points month on month. Gross sales margin was 26.16%, up 4.00 percentage points year on year, up 1.94 percentage points month on month; net sales margin was 17.81%, up 2.47 percentage points year on year, up 1.28 percentage points month on month.

reviews

The amount of activity on the special watch was obvious. The company's 2024H1 performance increased year-on-year. In the first half of 2024, the company achieved revenue of 1.109 billion yuan, +23.65% year over year; net profit to mother was 0.191 billion yuan, or +26.98% year over year. The company's revenue increased year-on-year, mainly benefiting from the significant amount of surfactants released for special functional and polymer materials. In the first half of 2024, the company's sales volume of surfactants for special functional and polymer materials reached 0.0842 million tons, +39.35% over the same period last year. At the same time, as the proportion of high-performance and high-value-added products increased, and the company continuously optimized production processes and reduced unit production costs, the company's profitability also improved. 2024H1's gross margin reached 25.23%, an increase of 2.10 percentage points over the previous year. The increase in revenue and profit margins also led to a high increase in the company's performance. In terms of expenses for the period, 2024H1's sales/management (including R&D) /finance expense ratios were 0.42%/6.32%/-0.64%, respectively, -0.11/-0.65/-0.60pct. The year-on-year decline in financial expenses was mainly due to an increase in interest income due to increased bank deposits in the current period.

Leading domestic specialty surfactants, sector cultivation drives medium- to long-term growth. The company is a leading domestic specialty surfactant enterprise with large production scale, comprehensive variety, and high technological content. Currently, it has an annual production capacity of nearly 0.3 million tons of specialty surfactants. After years of practice, the company has formed a management system that revolves around sector development and systematic operation. Through the layout of products at the cultivation stage, growth stage, and maturity stage, the sustainable development of the enterprise is promoted. Up to now, the company has formed 16 major segments and is continuously developing new products in new segments. Application sectors such as new functional materials, resins and high-end electronic chemicals are being cultivated at an accelerated stage, but its broad market prospects will guarantee the company's continued development. At the same time, in the process of promoting sector development, the company has established a detailed database of industry characteristics according to industry characteristics to continuously track industry information, so that it can respond quickly to the needs of the industry and ensure its leading edge in technology. With the steady development of existing sectors and the continuous development of new sectors, I am optimistic that the company will continue to grow in the future.

Profit forecasting and valuation

We expect the company's 2024-2026 net profit to be 0.402/0.483/0.581 billion yuan, EPS 0.68/0.82/0.99, respectively, and the corresponding PE price is 12.41/10.33/8.58 times the current price. Real Madrid Technology is the leading domestic market. The company is deeply involved in the field of high-profit small-variety products. As new production capacity continues to be released, it is optimistic about the company's medium- to long-term growth and maintains a “buy” rating.

Risk warning

Risk of fluctuating raw material prices, risk of product demand falling short of expectations, risk of increased industry competition