24H1 performance: Achieved operating income of 0.214 billion yuan, an increase of 29.25% year on year, achieved net profit attributable to listed shareholders of 42.0947 million yuan, an increase of 37.29% year on year, and net profit after deducting non-recurring profit and loss of 41.2606 million yuan, an increase of 39.77% year on year.

24Q2 results: Achieved operating income of 0.123 billion yuan, an increase of 27.08% year on year, achieved net profit attributable to listed shareholders of 25.8112 million yuan, an increase of 25.13% year on year, and net profit after deducting non-recurring profit and loss of 25.3219 million yuan, an increase of 25.73% year on year.

Overseas demand is good, and revenue is growing steadily. In the first half of the year, the domestic downstream boom improved, and overseas demand was strong. The company focused on intelligent processing of non-metallic materials and fully automated operations, and carried out technological innovation and market development for three major industries, including digital printing, textile industry, and composite materials, and achieved good revenue growth.

The gross profit margin and net profit margin increased steadily in the first half of the year. 2024H1's gross margin was 44.30%, up 0.96 percentage points year over year; net margin was 19.66%, up 1.15 percentage points year over year. Q2 The gross margin for the single quarter was 44.47%, -0.18pct yoy, +0.4pct month-on-month; net margin was 21.06%, -0.33pct yoy, +3.27pct month-on-month.

The overall cost rate remained stable during the period. H1's expense ratio for the 2024 period was 23.00%, an increase of 0.17 percentage points over the previous year. Among them, the financial expense ratio was -3.31%, +2.62 percentage points year on year, mainly due to a decrease in exchange income; the management expense ratio was 4.48%, +0.03 percentage points year on year; the sales expense ratio was 15.31%, -0.78 percentage points year on year; and the R&D expense ratio was 6.52%, -1.70 percentage points year on year.

Strengthen non-metal cutting technology and accelerate the global strategy. AGCO's strategic focus is to enhance intelligent core technology in the field of non-metal cutting to strengthen the competitive advantage of products. To achieve this goal, the company plans to acquire Aristo in Germany to accelerate the globalization process, expand market share, and provide localized services. The company deepens internal reforms, uses digital means to optimize management, improve efficiency, and pay close attention to market competition, macroeconomics, and supply chain risks to ensure the steady implementation of the strategy.

Interim dividends give back to shareholders. The company's 2024 semi-annual profit distribution plan is to pay a cash dividend of 1.80 yuan (tax included) for every 10 shares, totaling about 14.7369 million yuan, accounting for 35.01% of the medium-term net profit. This dividend is the first mid-term dividend since the company went public.

Maintain a “Highly Recommended” investment rating. The company is a leader in domestic intelligent cutting equipment and continues to improve its overseas sales network. Revenue is expected to achieve revenue of 0.494/0.623/0.792 billion yuan in the next three years, up 29%/26%/27% year on year, net profit to mother 0.1/0.13/0.169 billion yuan, up 32%/30% year on year, corresponding PE is 16x/12x/9x, maintaining a “highly recommended” rating.

Risk warning: rising raw material prices, exchange rate fluctuations, overseas market risks