Event: The company released its 2024 semi-annual report. 2024H1 achieved revenue of 0.537 billion yuan, +19.42% year over year, and realized net profit of 0.104 billion yuan, or -5.39% year over year. The main reason was that the confirmed revenue pace in 2022 slowed to Q1 2023, leading to a high base impact in Q1 2023. On a quarterly basis, 2024Q2 achieved revenue of 0.396 billion yuan, +49.6%/+180% year over month; realized net profit of 0.081 billion yuan, +15.5%/+257% year over month, and realized net profit of 0.067 billion yuan after deduction of non-return to mother, +8.5%/+832% year over month. 2024Q2 gross sales margin was 33.23%, -9.27pct/+4.44pct; net sales margin was 20.08%, -5.84pct/+5.42pct month-on-month.

Deeply involved in the power information technology industry, all businesses are developing together. 2024H1's system integration/power design/construction and operation and maintenance achieved revenue of 0.433/0.041/0.061 billion yuan respectively, +25.35%/+108.13%/-25.59% year-on-year, and gross margins of 28.35%/70.56%/31.20%, respectively, -9.36/+2.15/-11.94pct. The company has been engaged in the power information technology industry for many years and has developed a one-stop smart grid integrated service capability. The dual carbon goal of promoting the construction of new power systems and the digital transformation of power enterprises will have a positive impact on the company.

Based on years of development in Jiangsu, the performance of Anhui Province has increased significantly. 2024H1's revenue in the Jiangsu/Beijing/Anhui/Shanghai and Fujian regions was 1.57/0.44/0.241/0.051/0.027 billion yuan respectively, accounting for 29%/8%/45%/9%/5%, respectively. Among them, the share of the Anhui regional business increased significantly compared to the same period last year, +35 pcts year on year, while the share of Jiangsu Province decreased to -25 pcts year on year. The company has been deeply involved in regional business development in Jiangsu for many years. It is based in Jiangsu and actively develops power business outside of the province. Anhui Province, Beijing City, Shanghai City, Fujian Province and other regions all have business revenue. Among them, Anhui Province contributed outstanding performance, accounting for 45%, and revenue +435.32% over the same period. Currently, the company has established East China Division, North Division and Southern Division to gradually expand the company's business to the whole country, and is expected to further expand the scope of business in the future.

Investment advice: We expect the company to achieve net profit of 0.313/0.405/0.497 billion yuan in 2024-2026, +21.9%/+29.7%/+22.6% year-on-year, corresponding EPS of 0.94/1.21/1.49 yuan, maintaining a “buy” rating.

Risk warning: concentration of major customers; concentration of major suppliers; deterioration of market competition