ASIA CUANON TECHNOLOGY(SHANGHAI)(603378):1H24 REVENUE DRAGGED;GROSS MARGIN AND PROFIT MARGIN UNDER PRESSURE
ASIA CUANON TECHNOLOGY(SHANGHAI)(603378):1H24 REVENUE DRAGGED;GROSS MARGIN AND PROFIT MARGIN UNDER PRESSURE
Product prices were under pressure, leading to a decline in GM. Due to the falling prices of engineering coatings (ASP down 10% YoY in 1H24), the GM of the coatings segment fell 9.7ppt YoY to 31% in 1H24. Similarly, the GM of the insulation segment dropped 5.2ppt YoY to 12.4%, and that of the waterproofing segment declined 10.1ppt to -10%, mainly due to the conversion of waterproofing factories into fixed assets, low capacity utilization, and high fixed depreciation costs. The firm's overall blended GM fell 10.8ppt YoY to 23% in 1H24 (compared to -9ppt YoY to 24.4% in 2Q24).1H24 results miss our expectations
1H24的結果改善低於我們的預期
Asia Cuanon Technology (Shanghai) announced its 1H24 results: Revenue fell 30% YoY to Rmb1.04bn, and net profit attributable to shareholders turned negative to -Rmb19.13mn. In 2Q24, revenue fell 25% YoY to Rmb748mn and net profit rose 14% YoY to around Rmb62.60mn. The firm's 1H24 results missed our expectations due to falling revenue and GM.
亞士創能（上海）宣佈其1H24的業績：營業收入同比下降30%，至10.4億元人民幣，歸屬股東的淨利潤爲負19.13百萬元人民幣。在2Q24，營業收入同比下降25%，至7.48億元人民幣，淨利潤同比增長14%，約爲6.26億元人民幣。由於營業收入和淨利潤的下降，該公司1H24的業績低於我們的預期。
Revenue declined sharply as demand weakened and the firm adjusted its customer base. In 1H24, revenue from the coatings segment fell 41% YoY to Rmb610mn (vs. -52% and -36% YoY in 1Q24 and 2Q24), with total sales volume of coatings dropping 35% YoY to 210,000t in 1H24 (vs. -39% and -33% YoY in 1Q24 and 2Q24). Among other segments, revenue from energy-saving materials for buildings fell 14% YoY to Rmb253mn (vs. -26% and -7% YoY in 1Q24 and 2Q24), while revenue from the waterproofing segment rose 21% YoY to Rmb135mn (vs. +11% and +25% YoY in 1Q24 and 2Q24). Additionally, the revenue contribution from direct sales decreased by 6ppt YoY to 14.6% in 1H24.
由於需求疲弱和公司調整客戶群，營業收入急劇下降。在1H24，塗料業務收入同比下降41%，至6.1億元人民幣（與1Q24和2Q24的-52%和-36%年同比相比），塗料總銷售量在1H24同比下降35%，至21萬噸（與1Q24和2Q24的-39%和-33%年同比相比）。在其他業務板塊中，建築節能材料業務收入同比下降14%，至2.53億元人民幣（與1Q24和2Q24的-26%和-7%年同比相比），而防水業務收入同比上升21%，至1.35億元人民幣（與1Q24和2Q24的+11%和+25%年同比相比）。此外，直接銷售的營業收入貢獻在1H24同比減少6ppt，至14.6%。
Product prices were under pressure, leading to a decline in GM. Due to the falling prices of engineering coatings (ASP down 10% YoY in 1H24), the GM of the coatings segment fell 9.7ppt YoY to 31% in 1H24. Similarly, the GM of the insulation segment dropped 5.2ppt YoY to 12.4%, and that of the waterproofing segment declined 10.1ppt to -10%, mainly due to the conversion of waterproofing factories into fixed assets, low capacity utilization, and high fixed depreciation costs. The firm's overall blended GM fell 10.8ppt YoY to 23% in 1H24 (compared to -9ppt YoY to 24.4% in 2Q24).
產品價格受到壓力，導致毛利率下降。由於工程塗料價格下降（1H24平均售價同比下降10%），塗料業務毛利率在1H24同比下降9.7ppt，至31%。同樣，絕緣材料業務毛利率同比下降5.2ppt，至12.4%，而防水業務毛利率下降10.1ppt，至-10%，主要是由於防水工廠轉爲固定資產、低產能利用率和高固定折舊成本。該公司整體混合毛利率在1H24同比下降10.8ppt，至23%（與2Q24的-9ppt同比下降至24.4%相比）。
Rapid expense reduction. The firm's expenses were reduced notably in 1H24, with selling, G&A, and R&D expenses falling by 26%, 9%, and 15% YoY. However, the expense ratio increased due to declining revenue, rising 5.1ppt YoY to 29.7% in 1H24. Additionally, the expense ratio rose by 1.4ppt YoY in 2Q24.
快速降低費用。該公司的費用在1H24顯著減少，銷售、管理及行政和研發費用同比下降26%、9%和15%。然而，由於營業收入下降，費用率同比上升5.1ppt，至29.7%。此外，費用率在2Q24同比上升1.4ppt。
Write-back of credit impairment boosted profit margin. In 2Q24, the firm's credit impairment was a recovery of Rmb30.63mn (compared to a provision of Rmb74.92mn in 2Q23), which contributed to a 2.8ppt YoY increase in its 2Q24 net margin, reaching 8.4%. Excluding the impact of credit impairment, the firm's operating profit margin was 3.8% in 2Q24 (-10.7ppt YoY).
信貸減值準備的回籠提振了利潤率。在2Q24，該公司的信貸減值準備回籠達3063萬元人民幣（相比於2Q23的7492萬元人民幣撥備），這導致其2Q24淨利率同比增加2.8ppt，達到8.4%。除信貸減值準備的影響外，該公司的營運利潤率在2Q24爲3.8%（同比下降10.7ppt）。
Cash flow weakened. In 1H24, operating cash flow turned negative, resulting in an outflow of Rmb217mn (compared to an inflow of Rmb68.59mn in 1H23). The cash-to-revenue ratio fell by 12ppt YoY to 87%.
現金流狀況疲軟。在2024年上半年，經營現金流量變爲負數，導致淨流出人民幣2.17億（相比於2023年上半年的淨流入6,859萬人民幣）。現金與營業收入比率同比下降12個百分點至87%。
High gearing ratio. The firm's debt-to-asset ratio remained stable at 75% and net gearing ratio was 106% in 1H24.
負債率高。該公司的資產負債比率保持穩定，爲75%，淨負債率爲106%（2024年上半年）。
Trends to watch
需要注意的趨勢
Industry demand under pressure; operating pressure increasing. Looking ahead, we believe the pressure on GFA completed will remain high, weighing on demand for coatings and insulation. We expect the firm to fine-tune its product mix and restore profitability by adjusting distribution channels and eliminating low-GM products.
行業需求壓力增大，運營壓力增加。展望未來，我們認爲國家已完工面積（GFA completed）的壓力將持續較高，對塗料和隔熱材料的需求產生壓力。我們預計該公司將通過調整產品組合、優化銷售渠道和淘汰低毛利產品來恢復盈利能力。
Financials and valuation
財務和估值。
Given falling revenue, we lower our 2024 net profit forecast by 72% to Rmb62.51mn and introduce our 2025 net profit forecast of Rmb64.76mn. The stock is trading at 45x 2024e and 44x 2025e P/E. Considering the firm's status as an industry leader, we maintain OUTPERFORM rating and only cut our TP 31% to Rmb7.2, implying 49x 2024e and 48x 2025e P/E, and offering 9% upside.
由於營業收入下降，我們將2024年淨利潤預測下調72%至6251萬元，並引入了2025年淨利潤預測，爲6476萬元。該股票目前以2024年預測市盈率45倍和2025年預測市盈率44倍交易。考慮到該公司作爲行業領導者的地位，我們保持推薦的評級，並將目標價下調31%至7.2港元，相當於2024年預測市盈率49倍和2025年預測市盈率48倍，提供9%的上行空間。
Risks
風險
Demand recovery disappoints; competition intensifies.
需求復甦令人失望，競爭加劇。
譯文內容由第三人軟體翻譯。
