Incident Overview

The company released its 2024 mid-year report.

Overseas markets accelerated, and Q2 revenue continued to grow rapidly

24H1 achieved revenue of 0.57 billion yuan, +29% year over year, of which Q2 was 0.33 billion yuan, +24% year over year, which is basically in line with expectations. By product, 24H1 achieved revenue of 0.407, 0.14, and 0.019 billion yuan for high-altitude safety lifting equipment, high-altitude safety protection equipment, and high-altitude safety operation services, respectively. Looking at the subregion, 24H1's domestic sales and export sales achieved revenue of 262 million yuan and 308 million yuan respectively, accounting for 54% of export revenue, a further increase over the full year of '23 (49%), reflecting rapid growth in overseas markets.

24H1 Middle America achieved revenue of 0.208 billion yuan, accounting for 36% of revenue. The US market is still the company's largest source of overseas revenue.

Looking ahead to the second half of the year, domestic wind power construction is expected to accelerate, and overseas markets are still expanding rapidly, and I am optimistic that the revenue side will continue to grow rapidly.

The gross margin rose and the expense ratio declined rapidly. The H1 net margin increased 24H1's net profit to mother and net profit of non-return to mother by 1.40 million yuan and 123 million yuan respectively, +72% and +77%, respectively. Both were in the upper performance forecast range. Among them, Q2 was 0.82 million yuan and 171 million yuan, respectively, +23% and +22% year-on-year, respectively. The 24H1 net sales margin and net profit margin after deducting non-sales were 24.63% and 21.60%, respectively, compared with +6.09 and +5.79pct, respectively, and the profit level increased significantly. 1) Margin side: 24H1 sales gross margin was 48.64%, +2.15pct year on year. We determined that it was mainly due to product structure optimization, raw material price reduction, etc.; 2) Expense side: the cost rate during the 24H1 period was 23.35%, -5.15pct year on year, further driving the increase in net interest rate. Among them, sales, management, R&D, and financial expense ratios were -4.61, -0.03, -3.61, and +3.10pct, respectively.

Overseas market expansion & product expansion open up the company's medium- to long-term growth space 1) Overseas business is growing rapidly, and there is still plenty of room for improvement. The overseas wind power aerial work equipment market is larger than the domestic market. The company's products have obtained relevant overseas certifications, and there is still a lot of room for improvement in overseas revenue. 2) Continuously enrich and improve the product line, and continue to open up room for growth. In the field of wind power, in order to adapt to high tower cylinders, the company introduced a dual-engine linkage solution (lift+no crawler); in order to adapt to the development of flexible towers, hybrid towers, and floating fans, the company developed and launched products such as heavy-duty elevators and rack and pinion lifts. In addition, the company is actively developing new products, such as material carriers, tower cranes, etc., and is actively expanding new fields such as construction, communications, hydropower, bridges, and fire protection, which is expected to contribute to new growth points in performance.

Investment advice

We maintained our 2024-2026 revenue forecasts of 1,475, 18.99, and 2,356 billion yuan, respectively; maintained 2024-2026 net profit forecasts of 2.95, 3.86, and 504 million yuan, respectively, +43%, +31%, and +30% year-on-year, and adjusted the 2024-2026 EPS to 1.39, 1.82, and 2.37 yuan, respectively (original values of 1.94, 2.55 and 3.32 yuan, mainly changes in share capital) The 2024/8/27 stock price of 20.57 yuan corresponds to 15, 11, and 9 times PE, maintaining an “overbearing” rating.

Risk warning

New business expansion fell short of expectations, profit levels declined, wind power installations fell short of expectations, etc.