Incident: The company announced its 2024 interim report. 2024H1 achieved operating income of 0.629 billion yuan, a year-on-year decrease of 29.02%; realized net profit to mother -0.107 billion yuan, a year-on-year decrease of 203.42%. 2024Q2 achieved operating income of 0.386 billion yuan, a year-on-year decrease of 27.03%; realized net profit to mother of 0.038 billion yuan, a year-on-year decrease of 1201.27%.
Demand in the machine tool industry is under pressure, and the company's CNC system and machine tool business has increased slightly. According to the China Machine Tool Industry Association, from January to June 2024, the revenue of key linked companies fell 3% year on year, and total profit decreased 9.2% year on year. New orders for metalworking machine tools increased 4.1% year over year, and in-hand orders fell 5.4% year over year. According to the National Bureau of Statistics, in January-June, enterprises above the national scale produced 0.333 million units of gold cutting machines, an increase of 5.7% over the previous year.
Downstream demand in the machine tool industry has been weak since 2024. The company has made efforts to develop the market. 2024H1 CNC system and machine tool revenue was 0.383 billion yuan, up 3.89% year on year; robot and intelligent production line revenue was 0.204 billion yuan, down 57.82% year on year, mainly affected by ongoing orders related to the new energy power battery intelligent equipment business; the NEV supporting business achieved revenue of 14.73 million yuan, an increase of 31.60% year on year.
The gross margin of the company's CNC systems and machine tools increased, and the increase in the cost ratio during the period led to a marked decline in net interest rates.
2024H1's comprehensive gross margin was 34.75%, up 4.43pp year on year. Among them, the gross profit margin of CNC systems and machine tools was 40.79%, up 4.33pp year on year, the gross profit margin of robots and intelligent production lines was 22.01%, and the gross margin decreased by 3.52 pp. The net interest rate of the 2024H1 company was -20.39%, down 15.82pp from the year on year, mainly affected by the increase in the cost rate during the period. The cost ratio for the period of 2024H1 was 59.37%, up 18.59pp. Among them, the sales/management/R&D/finance expenses ratio was 15.90%/14.40%/26.00%/3.06%, respectively, up 6.60pp/5.12pp/5.34pp/1.53pp year-on-year, respectively.
Profit forecasting and investment advice. The company's net profit for 2024-2026 is expected to be 0.094/0.147/0.233 billion yuan, respectively, and revenue is expected to maintain a compound growth rate of 24% over the next three years. Considering that the company will fully benefit from the growth of the high-end CNC system import substitution market, there is plenty of room for future growth and maintain a “holding” rating.
Risk warning: risk of macroeconomic fluctuations; increased risk of industry competition; risk of technology research and development falling short of expectations.