Event: On August 27, 2024, CITIC released its 2024 semi-annual report. 2024H1's revenue was 3.376 billion yuan, +75.73% YoY, and net profit to mother 0.231 billion yuan, +135.86% YoY.

2024Q2's revenue was 1.562 billion yuan, +41.26% YoY and -13.90% YoY. Net profit to mother was 0.077 billion yuan, +30.40% year over year, and -49.78% month over month. The global photovoltaic market is still maintaining a good growth trend, and demand for installed equipment for overseas photovoltaic ground power plants is strong, thus driving the company's overseas photovoltaic bracket business to continue to grow.

Forwardly developing overseas markets, the horizontal and vertical integration layout of the tracking bracket system is gradually improving. During the reporting period, the company's support business achieved revenue of 3.268 billion yuan, +97.70% compared with the same period last year. Among them, the tracking stand was delivered about 5.89GW, +263.58% compared to the same period, and the fixed bracket delivered about 2.08GW, or -41.74% compared to the same period last year. Compared with 2023, the company's share of overseas project revenue increased. During the reporting period, the revenue from overseas projects in the support business was 2.717 billion yuan, and the revenue from domestic projects was 0.551 billion yuan. Frequent political conflicts and the safety and stability of major international transportation routes have had a certain impact on order delivery in overseas markets.

Product structure optimization combined the company's cost reduction and market development, and supported the increase in gross margin. During the reporting period, the comprehensive gross profit margin of the company's support business was 19.75%, an increase of 3.35 percentage points over the previous year. Among them, the gross profit margin of the tracking bracket is 20.57%, and the gross profit margin of the fixed bracket is 14.15%. Currently, the company has orders of about 6.669 billion yuan, of which the tracking stand is about 5.549 billion yuan, the fixed bracket is about 1.073 billion yuan, and the others are about 0.047 billion yuan.

Global brand influence, top 5 global market share. The global market share of CITIC's tracking bracket system shipments in 2023 reached 9%, ranking fifth in the world, and is the only Chinese company in the top five in the world.

During the reporting period, the company signed a land lease agreement with the Saudi Industrial Cities and Technological Zone Authority (MODON) to plan the construction of localized production capacity in Saudi Arabia. After completion, the Saudi factory will become the second overseas production base after the Indian factory, with a design capacity of 3 GW, and the supporting company's global supply chain system can deliver about 10 GW locally.

Investment advice: We expect the company's 2024-2026 revenue to be 9.343/11.427/13.61 billion yuan, net profit to mother of 0.658/0.831/1.076 billion yuan, EPS 3.25/4.11/5.31 yuan respectively, and PE 18.23/14.42/11.14 times, giving it a “recommended” rating.

Risk warning: the risk of policy changes, the risk that market demand falls short of expectations, competition increases risk.