The company released its 2024 semi-annual report

The company's 24Q2 revenue was 1.54 billion, -14.5% year-on-year, net profit of 0.11 billion yuan, +7% year-on-year, after deducting 0.1 billion yuan of non-return mother, -0.4% year-on-year;

24H1's revenue was 3.22 billion yuan, -3.7% YoY, net profit 0.23 billion, +47.9% YoY, deducted 0.22 billion, +41.8% YoY. The decline in revenue was due to poor overall consumer demand, no significant improvement in the overall supply of domestic production capacity in the metal packaging industry, and the year-on-year decline in sales unit prices. The sharp increase in profits is mainly due to the company actively improving customer service levels, optimizing production capacity layout, and strengthening overseas business expansion.

By product, the company's 24H1 can revenue was 3.03 billion, -3.77%, accounting for 94.1%; lid revenue was 8.75 million, -0.85% YoY; and EMC contract energy revenue was 3.4 million, +1.62% YoY.

By region, domestic revenue was 2.79 billion yuan, -6.3%, accounting for 86.8%, or 2.4 pct year on year; overseas revenue was 0.43 billion, +17.9% year on year, accounting for 13.2%, or 2.4 pct year on year.

The company's 24H1 gross profit margin was 14.7%, +3.4pct; 24Q2 gross profit margin was 15.5%, +3.6pct year; domestic gross profit margin was 13.5%, +2.9pct year on year; overseas gross profit margin was 22.9%, +4.8pct year on year.

On the cost side, the company's 24H1 sales/management/ R&D/finance expenses ratio was 0.54%/3.84%/0.86%/0.5%, respectively, +0.1pct/0.5pct/0.2pct/-0.8pct. Among them, the company's 24H1 financial expenses were 0.016 billion, -61.84% year-on-year, mainly due to a decrease in borrowing.

The company's 24H1 net profit margin was 7.4%, +2.8pct year-on-year.

High-end beer market drives growth in aluminum bottle business

The company's 24H1 aluminum bottle benefited from the development direction of high-end demand in the downstream market, showing a good growth trend. Sales increased significantly, and the scale effect was reflected, which led to an increase in overall operating profit margin.

The company continued to provide products for famous brands such as Budweiser, Qingdao, Carlsberg, China Resources Snowflake, and Heineken in 24H1. The newly launched lightweight aluminum bottles, 1-liter high-capacity aluminum bottles and aluminum cups received a good response in the market. In the context of the acceleration of consumption upgrading trends such as beer and beverages, the market size of high-end aluminum bottle products will increase rapidly, and the advantages of the company's high-end aluminum bottle products will be fully reflected.

Three-piece cans: develop the food can business and optimize internal management

The company's three-piece cans have achieved good results in terms of downstream customer market share, and have also made some progress in expanding the food can business. In terms of internal management, we continue to optimize production capacity allocation. The company has basically completed construction of the 24H1 Neijiang Plant and is preparing to invest in the construction of a production base in Nanning. Improving the level of supply chain management has improved markedly in terms of supplier structure, inventory management, and application of new materials; continuing to increase technology research and development and focusing on lean improvement have made great progress in improving product structures and reducing production costs.

Two-piece cans: Develop overseas customers and promote the development and sale of new products. Demand growth in the domestic two-piece can industry is quite obvious, and domestic sales continue to grow. Overseas, the company actively expands new customers and achieves steady business growth. In the field of new product sales, the company has further expanded the marketing and sales business of digital can products.

In terms of new product development, through long-term cooperation with equipment manufacturers, the company completed mass production of high-end customized products and new cross-industry SBC series products in the first half of the year, enriching the variety of products and enhancing the technical strength of differentiated competition.

Adjust profit forecasts to maintain “buy” ratings

Relying on industrial layout and scale, quality control, “stick-in” business model, comprehensive solutions, interdependent customer groups, intelligent packaging and brand advantages, the company has formed a strong integrated metal packaging service capability with “promotion” characteristics. Based on the company's 24H1 performance, the company's net profit to mother increased dramatically. At the same time, considering the high-end development trend of the beer market and the impact of the company's overseas business expansion on the company, we raised our profit forecast. The company's net profit for 24-26 is 0.47/0.55/0.63 billion yuan, respectively (previous value was 0.432/0.499/0.574 billion yuan), and the corresponding PE is 9/8/7X, respectively.

Risk warning: risk of price fluctuations of major raw materials; risk of product quality control; risk of operational management of business growth and diversified development.