Incident: The company's 2024H1 revenue was 7.912 billion yuan, up 14.92% year on year; attributable net profit was 0.811 billion yuan, up 25.35% year on year; net profit not returned to mother was 0.759 billion yuan, down 35.23% year on year.

The completion growth rate gradually declined, and 24Q2 performance weakened month-on-month. Real estate completion area declined year-on-year in 2024, demand in the back-end industry chain was under pressure, float glass prices fell quarter by quarter (Q2 average price 90.99 yuan/weight box, down 14.72 yuan/weight box), and inventory increased month-on-month (as of 2024Q2, inventory of 40.66 million weight boxes, up 7.7 million weight boxes from month to month). However, although raw materials declined, soda ash (the average price in Q2 was 2,155 yuan/ton, down 119 yuan/ton), the price decline had a greater impact. 2024Q2 performance declined under pressure, falling 16.42% month-on-month. In terms of photovoltaics, production and sales increased dramatically, and 2024H1 sales reached 0.185 billion square meters, contributing to revenue growth.

Prices and costs have decreased at the same time, and unit profit changes are limited. In 2024H1, the company's revenue for single float glass boxes fell by 5 yuan year on year. On the cost side, the company's cost of a single float glass box increased by 0.67 yuan year on year in 2024H1; among them, the management costs of a single float glass box (including R&D) were basically the same year on year, sales expenses were basically the same year on year, and financial expenses increased by 0.62 yuan year on year. On the profit side, the company's net profit for a single box of float glass was basically the same year on year in 2024H1, and net profit after deducting non-single boxes increased by 0.55 yuan year on year.

Various policies, such as storage and pensions, have been implemented, and demand for housing stock has been stimulated. Currently, models such as government storage and state-owned enterprise trade-in are gradually being developed in various regions. With the promotion of more cities and the implementation of supporting funds in the future, it is expected to play a positive role in removing inventory and stabilizing the market, which is conducive to speeding up the stabilization of the real estate market.

At the same time, after the establishment of the housing pension system proposed recently, it is conducive to implementing safety work in old neighborhoods, maintaining the rules of operation of the stock market, and also in line with the development needs of urbanization work in megacities. Through actions such as renewal and repair, it is also expected to promote the preservation and appreciation of houses, enhance their stability and liquidity, promote the vigorous development of the real estate market, and further boost demand for glass.

Investment advice: We expect the company to achieve net profit of 1.588/1.947/2.418 billion yuan in 2024-2026, an increase of -9.3%/22.6%/24.2% year-on-year. The PE corresponding to the latest closing price is 9x /7x /6x, maintaining the “increase” rating.

Risk warning: Demand declined due to the economy falling short of expectations; risk of exchange rate fluctuations; industry falling beyond expectations.