Key points of investment

Event: On August 30, 2024, the company released its 2024 semi-annual report.

2024H1's revenue was 1.95 billion yuan, +5.2% year over year; net profit to mother was 0.48 billion yuan, -19.7% year over year; of these, 2024Q2 had revenue of 0.23 billion yuan, +17.8%/-86.4% year over month, net profit of 0.09 billion yuan, +8.2%/-115.4% year on month, respectively. The main reason (1) increased fuel costs due to lower temperatures than the same period last year (2) high-speed rail media and outdoor naked eye 3D media resources Increased costs.

Profit side: Expense rates have increased. 2024H1's gross profit margin and net interest rate were 35.5%/25.2%, respectively, -8.5pcts/-8.7pcts year over year, mainly due to cost increases due to multiple factors such as the real estate cycle. Among the company's main expenses, sales expenses ratio (2.9%) and R&D expenses rate (0.3%) increased, management expenses rate (3.1%) decreased, and financial expenses ratio (-3.8%) increased a lot. Overall, the four expense ratios increased by 1.4 pcts, which slightly affected the company's profitability.

We have plenty of cash on hand and continue to deploy clean and low-carbon technology. As of 2024H1, the company's monetary capital was 7.72 billion yuan, and its financial strength is beneficial to the company's hydrogen energy layout. Actively promoting clean and low carbon, (1) The company is strategically investing in Edelman Hydrogen Energy Equipment Co., Ltd. in 2021, and is currently working with Edelman to explore breakthroughs in the direction of hydrogen production and hydrogen cogeneration to integrate upstream and downstream core technology and equipment in the industry to lay the foundation for the rapid development of future hydrogen energy business; (2) The company is building a comprehensive integrated energy service system covering multiple sources, networks, and cargo with multiple complementary energy sources and demand.

Profit Forecasts and Investment Ratings:

Considering the impact of the real estate cycle, etc., we downgraded our performance forecast and predicted that the company's 2024-2026 revenue would be 3.59/3.8/4.07 billion yuan, respectively, and net profit to mother of 0.76/0.83/0.9 billion yuan, respectively. The corresponding PE was 16/15/14 times, respectively. The rating was downgraded and given an “increase in holdings” rating.

Risk warning:

New business development falls short of expectations; risk of fluctuations in raw material prices.