The company released its semi-annual report

24Q2 revenue of 0.3 billion increased by 8%, net profit due to mother of 0.03 billion decreased by 9%; net profit after deducting non-return to mother of 0.02 billion decreased by 17%

24H1 revenue of 0.5 billion increased 17%, net profit attributable to mother of 0.05 billion increased 17%, and net profit of 0.04 billion after deducting non-return to mother increased 6%;

24H1 revenue by product, revenue from functional safety gloves was 0.5 billion yuan, an increase of 18%; ultra-high molecular polyethylene fiber and other composite materials was 0.01 billion yuan, a decrease of 30%.

By region, 0.46 billion outside of the region increased by 29%, and 0.05 billion domestically decreased by 39%.

The 24H1 gross profit margin of 24.8% increased by 2.7 pct; of these, functional safety gloves increased 24.9% and 7pct; the gross profit margin of 11.8% of ultra-high molecular weight polyethylene fiber and other gross profit increased sharply year over year; 24H1 net interest rate of 9.6%, which was basically the same as the same year on year; the management fee rate of 5.2% increased by 1 pct, due to corresponding share payment fees and additional patents and land use rights amortization of new patents and land use rights in the first half of '24; the sales rate of 3.3% was increased by the marketing team to expand the market and participate in exhibitions at home and abroad This is due to the increase in related reception expenses, travel expenses, and the calculation of the marketing department's equity incentives to employees to pay the corresponding share expenses.

Continue to promote the construction of new materials projects

The company accelerated the construction of the subsidiary Hengshang Materials' “New Ultra Fiber Materials and Functional Safety Protective Equipment Development and Application Project” and production line run-in, breakthroughs in process preparation technology, and improved production line quality and efficiency. The company's ultra-high molecular weight polythene fiber production capacity has reached 3,000 tons at full capacity.

With the release of production capacity of ultra-high molecular weight polyethylene fibers and their composites, the company will become one of the few domestic enterprises to achieve large-scale production of ultra-high molecular weight polyethylene fibers and their composites, and has a full industrial chain layout on the production and application side of the ultra-high molecular weight polyethylene fiber industry.

Accelerate the construction of the Henghui Security Industrial Park project

The main construction project and public works of the Industrial Park Phase I “Functional Safety Glove Project with an annual output of 72 million” have been completed and accepted, the smart warehouse has been officially put into operation, and the core production equipment has entered in an orderly manner; the first batch of 4 buttermilk production lines and 8 PU production lines are proceeding with installation and commissioning according to the planned schedule. Among them, the 4th PU production line has already been put into mass production, 1 butadiene production line and 1 chemical prevention production line are being closely tested. After the test run is completed, the production line will be officially closed and put into operation; the new strategic materials project of the Industrial Park Phase II The “project with an annual output of 12,000 tons of ultra-high molecular weight polyethylene fiber” is progressing in an orderly manner. Among them, the first phase of the “4800 tons of ultra-high molecular weight polyethylene fiber project” is progressing smoothly according to the established plan.

Adjust profit forecasts to maintain “buy” ratings

The company's flexible management and intelligent application promote the overall improvement of enterprise production management, achieve new breakthroughs in R&D through cooperation, and establish a perfect domestic and foreign dual market sales system. Based on the 24H1 financial report, the company's 24Q2 net profit decreased year-on-year. We adjusted our profit forecast. We estimated that the return for 24-26 will be 0.14 billion, 0.19 billion, and 0.26 billion (the original value for 24-25 was 0.195/0.279/0.359 billion, respectively), and PE will be 18X, 13X, and 10X, respectively.

Risk warning: weak recovery in consumption; loss of core executives; risk of fluctuations in raw materials and energy prices; risk of exchange rate fluctuations, etc.