Event: The company publishes its 2024 mid-year report. The company achieved total operating income of 4.729 billion yuan in 2024H1, -4.16% year-on-year; realized net profit of 0.759 billion yuan, or -8.48% year-on-year. Among them, total revenue for the 2024Q2 single quarter was 2.492 billion yuan, -9.63% YoY; net profit to mother was 0.361 billion yuan, -18.15% YoY.

The company announced a mid-term dividend plan. The company plans to distribute cash dividends of 5 yuan for every 10 shares to all shareholders, totaling 0.472 billion yuan, accounting for 62% of the share returned to mother in the first half of 2024.

All categories of 2024H1 are under pressure, and traditional categories are superior to emerging categories. First category group: revenue of range hoods/gas stove/sterilizers -2.85%, -1.17%, -14%; second category group: all-in-one machine/steamer/oven revenue -11.24%, -18.47%, -23.48%; third category group: dishwasher/water purifier/water heater revenue -4.01%, -23.59%, and +14.84%. Revenue from integrated cookers -10.68% YoY.

Decline in profitability. Gross profit margin: 2024Q2 companies' gross margin -2.38pct year-on-year to 47.29%. Rate side: 2024Q2 sales/management/R&D/finance rate was 23.75%/4.75%/4.37%/-1.76%, year-on-year change -1.21pct/0.67pct/0.59pct/-0.5pct. Net interest rate: The company's 2024q2 net interest rate changed year-on-year - 1.62pct to 14.20%.

Cash flow is under pressure in the short term. 2024Q2's net operating cash flow was $0.359 billion, or -53.84% YoY. Among them, cash received from sales of goods was 2.685 billion yuan, -12.14% compared with the same period last year. This is mainly due to a slowdown in the current repayment rate, due to an increase in the maturity and repayment of bank guarantees.

Profit forecasting and investment advice. Considering the company's performance in the first half of the year and the overall environment of the kitchen appliance industry, we expect the company to achieve net profit of 1.641/1.737/1.826 billion yuan in 2024-2026, an increase of -5.3%/5.8%/5.1% year-on-year, and maintain the “increase” investment rating.

Risk warning: raw material prices fluctuate, real estate market fluctuation, and market competition intensified.