Incident: The company's total 24H1 revenue was 1.544 billion yuan, down 1.82% year on year, and net profit to mother was 0.096 billion yuan, down 7.56% year on year. Net profit after deducting non-return to mother was 0.085 billion yuan, a year-on-year decrease of 7.99%. According to single-quarter data, total revenue for the second quarter was 0.84 billion yuan, down 1.6% year on year, and net profit to mother for the second quarter was 0.059 billion yuan, down 13.74% year on year. Net profit after deducting non-return to mother for the second quarter was 0.052 billion yuan, a year-on-year decrease of 15.41%.

The company's main business revenue increased slightly. The company's 24H1 total revenue was 1.544 billion yuan. By business, the company's new metal materials business achieved operating income of 1.466 billion yuan, a year-on-year increase of 1.36%, a gross profit margin of 23.90%, 24.28% in the same period last year, and 0.078 billion yuan in other business revenue, a year-on-year decrease of 38.29%.

Excluding the impact of the decline in revenue growth in other businesses, the company's core metal materials business continued to grow slightly.

The company's gross sales margin rose slightly year on year, and net sales margin fell year on year. During the reporting period, the company's gross sales margin was 22.84%, 22.54% in the same period last year; the net sales margin was 8.10%, or 9.05% in the same period last year.

There was a slight increase on the cost side. The company's R&D expenses rate was 5.61%, compared to 5.07% in the same period last year. The company's expenses rate during the sales period was 14.23%, compared to 13.18% in the same period last year.

Develop in multiple fields and insist on investing in R&D. The company is a leading enterprise in the new materials industry, mainly engaged in R&D, production and sales of rare metal materials. Since 23, the company has continued to improve processing methods to make up for shortcomings in the industrial chain. The high-performance low-cost titanium alloy smelting production line has reached full production. The company's ingot production capacity has increased to 0.02 million tons/year, and the alloy ingot production capacity has broken through the 10,000 ton mark. The large-scale low-cost titanium alloy production line project for marine engineering has been fully launched, and efforts are being made to complete and put into operation as soon as possible. Continuing to increase investment in R&D, the company's total number of innovation platforms reached 31. Actively promote technical exchanges and cooperation with foreign countries, give full play to the role of a national platform, and strengthen communication with top domestic experts in related fields.

Profit forecast: We expect the company's 24-26 revenue of 3.893/4.751/5.343 billion yuan; net profit to mother of 0.238/0.308/0.376 billion yuan. Considering that the company's production capacity investment progress is expected to drive profit levels while actively exploring development models in various fields, we maintain the “gain” rating.

Risk warning: customer price reduction, loss of technical advantage, excessive business concentration, rising raw material prices.