外销拉动整体收入增长。公司海外业务表现亮眼，净水系列产品在北美渗透率高，为常见产品，北美强消费力+反渗透膜更换需求促使公司区域增速较高，关税及贸易摩擦方面，公司关税分产品预计为0-25%，此轮没有被额外加征关税，北美子公司具备美国、加拿大产能、仓库，可直接应对美国关税问题。公司深耕水处理产品领域，产品涵盖8 个大类、83 个系列、1700 多个品种规格，远销100 多个国家和地区，具有领先的品牌力与制造力，下属的加拿大Canature N.A. Inc 拥有的Novo、Hydrotech 以及Rainfresh 等品牌在北美水处理产品市场都享有较好的市场口碑。Key points of investment:
The company's revenue performance exceeded our expectations. Kaineng Health 2024H1 achieved revenue of 0.829 billion yuan, an increase of 4% year on year; realized net profit of 57.03 million yuan, an increase of 6% year on year; realized deducted non-net profit of 54.12 million yuan, an increase of 6% year on year.
Among them, in the Q2 single quarter, the company achieved revenue of 0.448 billion yuan, a year-on-year increase of 6%; realized net profit to mother of 34.74 million yuan, a year-on-year decrease of 7%; and realized deducted non-net profit of 33.62 million yuan, a year-on-year decrease of 4%. The company plans to distribute a cash dividend of RMB 0.5 to all shareholders for every 10 shares. The total proposed cash dividend is RMB 28.25 million. The company's revenue performance all exceeded our expectations. In terms of revenue, the company's overseas business revenue is expected to grow significantly. Driven by its North American subsidiary, the revenue growth rate is higher than the center; in terms of profit, the company benefited from increased production and cost dilution. Gross margin increased during the reporting period, superimposed expenses were well controlled, exchange earnings were stable, and the net profit growth rate exceeded our expectations.
Export sales drive overall revenue growth. The company's overseas business performance is outstanding. The water purification series products have a high penetration rate in North America. As a common product, the company's regional growth rate is high due to strong consumption power+reverse osmosis membrane replacement demand in North America. In terms of tariffs and trade frictions, the company's tariff is expected to be 0-25%. No additional tariffs have been imposed in this round. The North American subsidiary has production capacity and warehouses in the US and Canada, which can directly address US tariff issues. The company is deeply involved in the field of water treatment products. The products cover 8 categories, 83 series, and more than 1,700 product specifications, and are exported to more than 100 countries and regions. The Novo, Hydrotech and Rainresh brands owned by Canada's Canature N.A. Inc., which is a subsidiary, enjoy a good market reputation in the North American water treatment products market.
The domestic sales market environment is sluggish, opening up a second growth curve. The overall domestic sales market environment is relatively sluggish. The company's DSR and ODM business are expected to decline to a certain extent. The company issued convertible bonds in 2023 to raise 0.24 billion yuan in net capital. After delivery, it will add 0.7 million units of RO membrane reverse osmosis water purifiers. The additional production capacity is expected to create a second growth curve for the company.
Significant increase in gross profit and excellent cost control. The company's gross profit increased markedly in Q2, up 2 pcts to 40.9% year on year. The main reason was that the company's production growth clearly diluted costs; cost control was good, and 24Q2 taxes, surcharges, and sales expenses all declined. The company's 23H1 exchange income was 11.84 million yuan, and 24H1 was 10.69 million yuan. The reason for the stable exchange profit and loss was that the company settled at the central price of RMB against the US dollar, there was little fluctuation, and the timing of settlement etc. was good, which had no significant impact.
Profit forecasting and investment ratings. The company's domestic and foreign sales have recovered, and the sales volume of RO machines and other products is expected to set a second growth curve. We maintain our 24-26 profit forecast. We expect to achieve net profit of 0.159/0.192/0.219 billion yuan, up 20%/21%/14% year on year, corresponding to current price-earnings ratios of 17/14/12 times, respectively. The company's domestic and foreign markets are developing smoothly, and our own brands are expected to grow. We maintain an investment rating of “increase”.
Risk warning: raw material price fluctuation risk, exchange rate fluctuation risk.
