Event: The company publishes its 2024 semi-annual report. In 2024H1, the company achieved operating income of 10.965 billion yuan, +9.84% year-on-year; realized net profit to mother of 0.941 billion yuan, or +6.81% year-on-year. Net profit after deducting non-return to mother was 0.923 billion yuan, +7.61% YoY. Looking at a single quarter, 2024Q2 achieved revenue of 5.586 billion yuan, +11.29% year over year; net profit to mother 0.471 billion yuan, +6.40% year over year; net profit after deducting non-return to mother 0.462 billion yuan, +7.16% year over year.

The growth trend of various products is good, and the growth rate of export sales is impressive. 1) By product: 24H1 cookware/cooking appliances/food cooking appliances achieved revenue of 2.943/4.643/1.901 billion yuan respectively, +16.95%/+3.30%/+12.37% year-on-year. Among them, the gross margin of cookware/cooking appliances/food cooking appliances was -0.55pct/-1.48pct/-0.57pct year-on-year

26.99%/23.28%/20.38% 2) Subregions: 24H1 domestic and foreign businesses achieved revenue of 7.509/3.455 billion yuan respectively, +0.10%/+39.29% year-on-year. The gross margin was -0.37pct/+0.08pct year-on-year to 28.03%/16.51%.

The gross margin has declined, and the ability to control costs is strong. 1) Gross profit margin: -1.02pct/-1.24pct to 24.40%/24.38% year-on-year in 24H1/24Q2. 2) Rate side: 24H1 Sales/Management/R&D/Finance Rate YoY -0.62pct/-0.12pct/-0.12pct to 10.39%/1.77%/1.87%/-0.52%; 24Q2 Sales/Management/R&D/Finance Rate YoY -1.08pct/-0.04pct/+0.16pct/-0.03pct to 9.85%/1.83%/1.97%/-0.48% YoY. 3) Net interest rate: Overall, the company's 24H1/24Q2 net margin was -0.23pct/-0.38pct year-on-year to 8.57%/8.42%.

Profit forecasting and investment advice. We expect the company's net profit to be 2.3/2.52/2.72 billion yuan in 2024-2026, respectively, +5.6%/+9.3%/+8.2% year-on-year, maintaining a “buy” rating.

Risk warning: Consumption recovery falls short of expectations, industry competition intensifies, and new product development falls short of expectations.