CITIC released its 2024 semi-annual report. 2024H1 achieved revenue of 3.376 billion yuan, +75.73% year over year, and net profit of 0.231 billion yuan, +135.86% year over year; among them, 2024Q2 achieved revenue of 1.562 billion yuan, +41.26% year on year, -13.90% month on month; net profit to mother 0.077 billion yuan, +30.40% year on month, and -49.78% month on month.

Tracking stand sales are growing rapidly. The support business module achieved revenue of 3.268 billion yuan (of which 2.7 billion yuan for overseas projects and 0.551 billion yuan for domestic projects). According to the bracket product classification, the tracking stand was delivered about 5.89GW, +263.58% compared to the same period, and the fixed bracket was delivered about 2.08 GW.

In-hand orders are growing rapidly. By the end of the reporting period, the company had orders of about 6.669 billion yuan, of which tracking brackets were about 5.549 billion yuan, an increase of about 183.11% over the previous year, fixed brackets were about 1.073 billion yuan, and others were about 0.047 billion yuan. Among the in-hand orders for tracking brackets, the domestic project was 0.283 billion yuan, and the overseas project was 5.266 billion yuan. Among overseas projects, the Middle East Africa region is 2.307 billion yuan, East Asia India region is 2.225 billion yuan, Europe is 0.286 billion yuan, Latin America is 0.17 billion yuan, and other regions are 0.278 billion yuan.

The product structure has been optimized, and the company's gross margin has increased steadily. In the first half of 2024, the operating rate of photovoltaic power plants in overseas markets such as the Middle East and India increased year-on-year. As overseas deliveries mostly used tracking brackets to optimize the structure of the company's delivery products, and the gradual implementation of strategic layouts such as cost reduction and market development by superimposing companies, the gross margin of photovoltaic stent systems increased steadily. During the reporting period, the comprehensive gross profit margin of the company's bracket business was 19.75% (including 20.57% gross profit margin for tracking brackets and 14.15% for fixed brackets), an increase of 3.35 percentage points over the previous year.

According to the “Global Solar PV Tracker Market Share Report 2024” issued by the internationally renowned energy consulting agency Wood Mackens, CITIC's 2023 tracking bracket system shipments reached 9% of the global market share, ranking fifth in the world, and is the only Chinese company in the top five in the world.

Investment advice: Considering the company's high inventory growth and strong certainty in the second half of the year, we expect the company's net profit to be 0.683/0.88/1.102 billion yuan in 24-26, 97.9%/28.9%/25.2% compared with the corresponding EPS of 3.37/4.35/5.44 yuan, respectively, to maintain a “buy” rating.

Risk warning: industry competition increases risks, and demand in the photovoltaic industry falls short of expected risks