Introduction to this report:
The company maintains a relatively rapid increase in net revenue and continues to increase its overseas share; relying on the UGREEN brand to build a comprehensive product matrix, technology research and development has created brand potential, and medium- to long-term development is worth looking forward to.
Key points of investment:
Maintain an increase in holdings. H1's revenue was 2.74 billion yuan/ +29.3%, net profit due to mother was 0.207 billion yuan/ +11.3%, which was not 0.201 billion yuan/ +13.6% in line with expectations; maintaining the forecast that the company's EPS for 2024-26 will be 1.12/1.36/1.64 yuan at a growth rate of 20/21/ 21%, maintaining a target price of 37.7 yuan and maintaining an increase in holdings.
H1 Overview: 1) Q1/2 single quarter revenue growth rate 27.1/ 31.4%, net growth rate of 14.2/ 13%; 2) H1 gross profit margin of 38.4% /-0.3pct, of which overseas/domestic business were 45.7% /-1.5pct, 29.4% /-1pct, charging/transmission/audio/video mobile peripheral/storage products, respectively, 37.9/41/41.2.4/35.4/25.7%, year-on-year, -1.1/+0.9/+1.3/+0.2/ -3.8pct; net interest rate 7.52% /-1.37pct; 3) Period expense ratio 29.1% /+1.3pct, with sales/management/R&D/finance expense ratios of 19.9/4.3/5.1/ -0.1%, +1.4/-0.5/-0.03pct, year-on-year respectively; 4) Net operating cash flow 0.185 billion yuan/ +69.8%; 5) Proposed cash dividend of 0.124 billion yuan, with a dividend rate of about 60%.
Charging revenue grew by more than 50%, and the overseas share continued to rise. 1) H1 sub-category: charging revenue 0.989 billion yuan/ +53.5% accounting for 36%, transmission 0.797 billion yuan/ +20.8% accounting for 29%, audio 0.491 billion yuan/ +9.7% accounting for 17.9%, mobile peripherals 0.236 billion yuan/ +16.5% accounting for 8.6%, storage 0.184 billion yuan/ +34.7% accounting for 6.7%; 2) By region: mainland China revenue 1.22 billion yuan Yuan/ +14.4% accounting for 44.7%; Europe 0.504 billion yuan/ +43.9% accounting for 18.4%; America 0.436 billion yuan/ +54.1% accounting for 15.9%; Southeast Asia 0.271 billion yuan/ +64.2% accounting for 9.9%; 3) Channel distribution: Amazon revenue 0.933 billion yuan/ +40.8% accounting for 34.1%, JD 0.427 billion yuan/ +9.7% accounting for 15.6%, Tmall 0.345 Billionyuan/ +10% accounted for 12.7%; in addition, AliExpress, Lazada, and Shopee all grew by more than 25%, but accounted for a relatively low share.
Strengthen R&D innovation and actively expand omnichannel. 1) Focus on increasing research and development efforts in the fields of NAS private cloud storage, headphone acoustics, charging battery life, etc. As of the end of H1, it had 24 invention patents (another 139 applications pending) and 292 utility model patents; 2) Mobile charging products, high-wattage gallium nitride fast charging products, intelligent cloud storage products in storage products, and headphone products in the audio and video category have all achieved rapid market expansion; 3) Relying on the continuous improvement of brand strength, the products have further consolidated online channels and expanded offline channels. Premium stores, Walmart and other large supermarkets; 3) Continued to launch new products, and NAS Private Cloud launched the new DXP series.
Risk warning: the risk of international trade friction, the risk of rising shipping, increased industry competition, etc.