Incident: The company released its 2024 mid-year report. During the reporting period, it achieved revenue of 3.172 billion yuan, +42.63% year over year; realized net profit of 0.173 billion yuan, +161.92% year over year; deducted non-net profit of 0.161 billion yuan, +171.99% year over year. Among them, Q2 achieved revenue of 1.643 billion yuan, +27.66%, and month-on-month; net profit to mother of 0.087 billion yuan, +71.33% YoY, +0.06% month-on-month; deducted non-net profit of 0.079 billion yuan, +61.61% YoY and -3.02% month-on-month.

Businesses such as photovoltaic brackets and high-speed connectors are growing rapidly, and profitability is relatively stable. In the first half of 2024, the company's solar bracket revenue was 1.932 billion yuan, +41.13% year over year; gross margin was 11.94%, +1.80pct year on year. The revenue of other connectors was 0.489 billion yuan, +130.83% year over year; gross margin was 38.17%, +3.30pct year on year, making it the second largest source of revenue. Communication connector revenue was 0.469 billion yuan, +0.39% year over year; gross margin was 30.46%, -0.19pct year over year. Consumer electronics connector revenue was 0.155 billion yuan, +34.64% year over year; gross margin was 22.75%, +0.72 pct year over year. The company's business of photovoltaic brackets, high-speed connectors, automotive connectors, etc. is growing rapidly, and the gross margin of various businesses is relatively stable.

The company's ability to control expenses is excellent. In the first half of 2024, the company's sales, management, R&D, and financial expenses rates were 2.01%/4.89%/3.37%/0.71%, respectively, and -0.03/+0.12/-1.24/+0.15pct, respectively; the cost rate for the period was 10.97%, -1.00pct year on year, and the cost control ability was excellent. Among them, the Q2 sales, management, R&D, and finance cost ratios were 2.09%/5.19%/3.71%/0.57%, respectively, and +0.17/+0.63/+0.71/-0.27pct, respectively; the period cost ratio was 11.57%, +1.24pct month-on-month. The main increase came from R&D expenses and management expenses. The company's US photovoltaic stent plant has been put into operation. As production capacity is gradually increased, the cost and cost side is expected to drop further.

Investment advice: We maintain the company's profit forecast for 2024-2026, and expect the company's net profit to be 0.377/0.507/0.604 billion yuan in 2024-2026, respectively. We are optimistic that the company's PV brackets, high-speed connectors and other businesses will continue to grow rapidly and maintain a “buy” rating.

Risk warning: downstream demand falls short of expectations, industry competition intensifies, overseas policy risks.