Incident: On August 26, 2024, the company released its 2024 semi-annual report. In the first half of 2024, it achieved revenue of 0.758 billion yuan, +39.59% year over year; net profit to mother 0.074 billion yuan, or -34.68% year on year; deducted non-net profit of 0.061 billion yuan, or -39.28% year on year. Among them, Q2 achieved revenue of 0.456 billion yuan in a single quarter, +51.08% month-on-month; net profit to mother 0.046 billion yuan, +61.66% month-on-month; after deducting non-net profit of 0.038 billion yuan, +68.36% month-on-month.

Container paint sales increased year-on-year in the first half of 2024, and wind power paint sales rebounded month-on-month in the second quarter. The company's sales volume of wind power paint, container paint and other industrial coatings in the first half of 2024 was 5085, 38351, and 752 tons, respectively, -17.99%, +196.46%, and -41.17%; the prices were 0.0321, 0.0152, 0.0165 million yuan/ton, respectively, -30.08%, -16.68%, and -6.67% year-on-year, mainly due to the overall year-on-year decline in raw material prices. Among them, the sales volume of wind power paint, container paint, and other industrial coatings in the second quarter of 2024 was 2,917, 23595, and 458 tons, respectively, +34.51%, +59.90%, and +55.60% month-on-month. Sales of all coatings rebounded markedly from the first quarter, leading to a month-on-month recovery in performance.

The container industry has entered a boom cycle, and is optimistic about long-term growth in the wind power & shipbuilding sector.

After entering 2024, global trade gradually recovered and the Red Sea incident continued to lengthen shipping distances, etc., the shipping industry chain entered an upward cycle, and replacement demand overdrafted by excessive container manufacturing in 2021 has also been mitigated. According to the shipping consulting agency Drewry, the global production and sales volume of the container manufacturing industry will exceed 4.5 millionTEU in 2024, global container holdings will further increase by 2.3%, and demand for container coatings will pick up steadily. Offshore wind power tower coatings have begun on-hook experiments, which are expected to contribute to the increase in wind power paint performance; marine coatings have been verified by the three classification societies of China, Norway, and the United States, while new fields such as photovoltaic coatings continue to advance, and the company is optimistic about long-term growth.

Investment advice: leading the container & wind power paint segment, and the IPO project opens up room for future growth.

We expect the company to achieve operating income of 1.655/1.797/2.138 billion yuan and net profit of 0.181/0.26/0.331 billion yuan in 2024-2026. The corresponding PE was 17.0/11.9/9.3 times, respectively, maintaining the “gain” rating.

Risk warning: risk of large fluctuations in raw material prices; risk of uncertainty about the progress of the IPO project; risk of downstream demand falling short of expectations.