occurrences
On August 27, the company released its 2024 mid-year report. The company achieved revenue of 0.36 billion yuan in the first half of 2024, an increase of 22% over the previous year; net profit to mother was 0.047 billion yuan, an increase of 76% over the previous year. In the second quarter, revenue was 0.194 billion yuan, up 26% year on year, up 16% month on month; net profit to mother was 0.024 billion yuan, up 53% year on year and 7.4% month on month.
Key points of investment
The company's product structure optimization results are remarkable, and profitability is expected to continue to increase (1) The company achieved a gross sales margin of 34.4% in 24 (including 35.2% gross profit margin of barcode carbon tape); the subsidiary Vison Smart's 24-year H1 achieved revenue of 0.064 billion yuan, a year-on-year increase of 92%, a net profit of 0.02 billion yuan, an increase of 185% year-on-year, and a net interest rate of 31%, an increase of 10 pcts year-on-year. The 0.23 billion square meter intelligent identification material production line (phase II) project with an annual output of 0.23 billion square meters, implemented by Vicens Intelligence, is expected to reach the intended state of use in 2026, and is expected to drive continuous improvement in performance as production capacity is released. (2) After deducting Vicens Intelligence from the consolidated statement, the company achieved revenue of 0.3 billion yuan in 24H1, an increase of 13% over the previous year. (3) On a quarterly basis, the company's operations are improving. Q2 revenue was 0.19 billion yuan, up 16% month-on-month, and net profit to mother was 0.024 billion yuan, up 7.4% month-on-month; the company's product structure optimization effect was remarkable, with 24Q2 gross profit margin of 35.3%, an increase of 1.8 percentage points over the previous month.
Excluding the impact of exchange losses and performance rewards, the performance was better. On the one hand, the company's H1 financial expenses in '24 were 4.3 million yuan, a significant increase compared to H1 financial expenses of -2.92 million yuan in '23, due to depreciation of the Brazilian real and depreciation of exchange losses; on the other hand, the company's profit from fair value change in H1 in '24 was 2.35 million yuan, compared to 1.52 million yuan for the same period in H1 in '23. Changes in assets. Vicon Intelligence has completed the second phase of its performance promise, that is, the cumulative net profit value after tax from 2022 to 2024 exceeds 31.35 million yuan, and has now achieved 44.49 million yuan, and more than 20% is an excess performance reward; assuming that the company 24H1 excludes the impact of exchange losses and performance rewards, the company's performance in the first half of the year was even better.
Domestic substitution and global strategies continue to advance, and the market share is gradually increasing (1) domestic substitution, share increase: The quality of some of the company's products has reached the level of replacing similar mainstream products in the international market, especially in the field of wax-based products, which clearly replace the products of world-class enterprises. (2) Complete products and channel collaboration: After years of development, the company has accumulated certain channel resources domestically and internationally. As the proportion of the company's high-end products gradually increases and channel resources are reused, the company's global share is expected to increase steadily.
Profit forecasting and valuation
Since the company's net profit for 2024-2026 is expected to be 0.1, 0.14, and 0.18 billion yuan, respectively, up 75%, 43%, and 30% year-on-year, the compound growth rate is 48% in 2023-2026. The corresponding PE is 19, 13, and 10 times, respectively, maintaining the “buy” rating.
Risk warning: risk of raw materials and market price fluctuations; exchange rate fluctuations, international trade risks.