Description of the event

The company's 2024H1 revenue was 0.45 billion yuan, up 27.78% year on year; net profit to mother was 54.16 million yuan, up 30.42% year on year.

Incident comments

Revenue performance in the single quarter was relatively stable. The revenue of 2024Q1 and 2024Q2 companies was 0.223 billion yuan and 0.229 billion yuan respectively, with year-on-year growth rates of 46% and 14%, respectively. The main reason was that the 24Q1 base was lower during the same period, which led to a higher year-on-year growth rate in 24Q1, and both declined in Q2 as the base increased. On a month-on-month basis, 24Q2's revenue increased slightly from month to month. At a micro level, product prices are basically stable, and we expect 24Q1 and 24Q2 sales to be basically the same; looking at single-quarter results, 24Q1 and 24Q2 were 0.029 and 0.025 billion yuan respectively. Of these, 24Q2 companies calculated asset impairment losses of about 5 million, mainly in preparation for inventory price declines. From a microscopic perspective, the overall downstream boom is relatively stable. In the medium term, we expect more countries and regions to raise energy efficiency bids for refrigerators, opening up a new growth relay point for the industry.

Production capacity is gradually climbing. The company's production capacity gradually climbed. Weiaiji's “vacuum glass construction project with an annual output of 2 million square meters” was capped in the first half of 2024, and the original vacuum glass production test line was moved from the Liancheng headquarters to the Xiamen factory area. At the same time, the company's VIP production capacity is also gradually climbing, and costs are optimized through internal capacity optimization. In the medium term, it is expected that the yield of vacuum glass products will increase and the release volume will bring a new growth curve to the company.

Customer coverage is gradually expanding. Well-known downstream customers served by the company include international customers such as Samsung, LG, Toshiba Home Appliances, Hitachi, Whirlpool, Bosch Home Appliances, and ArchiRick; domestic customers include well-known brand home appliance manufacturers such as Haier, Midea, Hisense, and Miling. In addition, the company also sells some products to medical research or transportation insulation equipment manufacturers such as Thermo Fisher and Haier Biomedical in the US, as well as logistics companies such as SF Express. The company's customer base is gradually expanding, providing new growth points for the company's operations.

Processes are continuously optimized, and costs and process advantages continue to expand. Furthermore, the company's processes continue to improve. At the same time, the company continues to promote the development of new products such as shell-shaped four-side sealing VIP, construction VIP, metal VIP, lightweight VIP, and ultra-thin VIP, as well as automated transformation of existing processes. It is expected that the competitive differences with small enterprises will be further widened in terms of technology, quality, and cost in the future.

Mid-term outlook: 1. On the VIP side, the market boom under the European bid upgrade is still sustainable, and it is expected to usher in new breakthroughs in the Japanese and Korean markets. As far as the company is concerned, the construction of the new base in Anhui is going well, and the gradual release of production capacity is expected to contribute to a significant increase in the company's performance in 2024. Within the entire industry, the company has accumulated strong technology, technology, and cost advantages, and can also take the lead in this boom cycle to achieve another shift in share through a greater pace of expansion. 2. The vacuum glass business is progressing steadily, and it is expected to gradually achieve the second growth curve performance.

The expected 2024-2025 results are 0.13 and 0.18 billion yuan, corresponding PE is 15 or 11 times, and the purchase rating.

Risk warning

1. VIP board penetration falls short of expectations; 2. Vacuum glass progress falls short of expectations.