Performance increased significantly year over year, and profitability improved markedly. In the first half of 2024, the company achieved revenue of 0.57 billion yuan, +29.31% year on year; net profit to mother 0.14 billion yuan, +71.75% year over year; after deducting non-net profit of 0.123 billion yuan, +76.67% year over year. The gross profit margin for the first half of the year was 48.64%, +2.15pct year on year; the net profit margin was 24.63%, +6.09pct year on year. Previously, the company's performance forecast was 0.13-0.145 billion yuan of net profit to mother, after deducting 0.113-0.128 billion yuan of non-net profit.

The second-quarter results showed a high year-on-month increase, with gross margin exceeding 50%. In the second quarter of 2024, the company achieved revenue of 0.33 billion, +24.09% YoY, +37.07%; net profit to mother 0.082 billion, +23.13% YoY, +40.54% month-on-month; deducted non-net profit of 0.071 billion yuan, +22.37% YoY, +36.87% YoY. The gross profit margin for the second quarter was 50.15%, +5pct year on year, +3.59pct month on month, net profit margin 24.89%, -0.19pct year on year, and +0.62pct month on month.

Increased share of overseas revenue and optimized product structure led to an increase in gross margin. In the first half of the year, the company achieved revenue of 0.407 billion yuan for high-altitude safety lifting equipment, a gross profit margin of 48.72%, and achieved revenue of 0.14 billion yuan for high-altitude safety protection equipment, with a gross profit margin of 46.51%; revenue from high-altitude safety operation services was 0.019 billion yuan, with a gross profit margin of 52.58%.

The double increase in the company's share of high-value product shipments and overseas revenue led to an increase in gross margin.

Overseas revenue accounts for 54%, and gross margin is 20pct higher than domestic revenue. In the first half of the year, the company achieved domestic revenue of 0.262 billion yuan, with a gross profit margin of 37.77%; foreign revenue of 0.309 billion yuan, with a gross profit margin of 57.86%, accounting for 54% of overseas revenue, which was significantly higher than domestic gross margin. The company has been in overseas markets for many years, leading the market share in Europe and America, and has served 61 countries and regions around the world. We believe that the company's revenue scale and profitability are expected to grow rapidly, driven by the gradual recovery of wind power installations around the world and the upgrading of existing fan lifting equipment.

Risk warning: Overseas market development falls short of expectations; raw material prices have risen sharply; industry competition has intensified.

Investment advice: Raise profit forecasts and maintain the “better than market” rating.

The profit forecast was raised considering the company's overseas business performance and domestic and foreign gross margin differences in the first half of the year. We expect the company to achieve net profit of 0.307/0.391/0.53 billion yuan in 2024-2026 (the original forecast value for 24-25 was 0.251/0.322 billion yuan). The PE corresponding to the current stock price is 15/12/9 times, respectively, maintaining the “better than market” rating.