In 24Q2, the company's revenue and profit declined year on year, with a sharp increase from month to month. (1) 24Q2's revenue was 0.893 billion yuan, -25.96% YoY and +92.91% YoY. Net profit to mother was 0.121 billion yuan, -38.92% YoY and +128.16% YoY. After deducting non-net profit of 0.116 billion yuan, it was -34.72% YoY and +158.66%. Gross profit margin 27.00%, -0.47% YoY, -4.60% month-on-month. Net profit margin 13.53%, -2.87% YoY, +2.09% YoY. (2) 24H1's revenue was 1.356 billion yuan, or -34.20% year-on-year, mainly due to the slow start of construction by domestic customers during the current period and delays in requesting goods. Net profit attributable to mother was 0.174 billion yuan, or -36.23% YoY, after deducting non-net profit of 0.161 billion yuan, or -35.62% YoY. Gross profit margin was 28.57%, +4.61% YoY. Net profit margin was 12.82%, -0.41% YoY. The fee rate for the period was 13.23%, +3.43% year-on-year.

Overseas business accounts for 56% of revenue, and orders are delivered continuously. (1) The domestic and overseas revenue of 24H1 was 0.598 billion yuan/0.758 billion yuan respectively, accounting for 44.08%/55.92% of revenue, -48.04%/-16.72%, respectively, gross margin of 29.81%/27.59%, respectively, and gross margin +8.37%/+0.45%, respectively. (2) By the end of June '24, the company had successively shipped a number of European offshore projects. Among them, all offshore orders for the Moray West project in Scotland had been delivered, including 48 oversized single piles, 30 sets of transition sections, and 12 sets of sea towers, with a total delivery volume of about 0.11 million tons. The Noy-Lles D'Yeu etnoirmoutier project in France has a total of 61 single piles, and 41 have been delivered. For the first time, the Thor offshore wind power project in Denmark was transported independently by the company. The total installed capacity is 1 GW, and the first shipment has been completed. The German NSC offshore wind farm project has a total installed capacity of 1.6 GW, including 105 single piles and ancillary structures, and successfully completed the first phase of trial production.

24H1 net operating cash flow improved significantly year over year. As of 24/6/30, the company's inventory was 2.004 billion yuan, +12.09% year-on-year. Bills receivable were $0.007 billion, +1067.57% YoY. Accounts receivable were $1.431 billion, -23.38% YoY. Notes payable were $0.837 billion, or -31.90% YoY. Accounts payable was $0.603 billion, +26.39% YoY. Net operating cash flow was $0.247 billion, +199.75% YoY. Net investment cash flow -$0.4385 million, +99.95% YoY. Net financing cash flow -$0.551 billion, +27.53% YoY. Net operating cash flow improved significantly year-on-year, mainly due to an increase in the amount received in the current period compared to the previous period.

Profit forecasting and valuation. The company's net profit for 2024-2025 is estimated to be 0.514 billion yuan and 0.715 billion yuan, respectively, and the corresponding EPS is 0.81 and 1.12 yuan/share. Considering the development potential of the company's single export pile, referring to comparable company valuations, the company was given 25-30x PE in 2024 (corresponding PS ratio is 2.66-3.19x), with a reasonable value range of 20.16-24.20 yuan, giving it a “superior to the market” rating.

Risk warning. Overseas progress falls short of expectations, the growth rate of new energy sources is slowing down, competition is intensifying, raw material prices are rising, etc.