XINXING PIPES(000778) 光大证券·2024-08-20 07:07Investment Rating - The report maintains a rating of "Accumulate" for the company [4]. Core Views - The company reported a revenue of 18.731 billion yuan for the first half of 2024, a year-on-year decrease of 23.61%, and a net profit attributable to shareholders of 428 million yuan, down 48.99% year-on-year [1]. - The company is focusing on optimizing its product structure, with a significant increase in differentiated product sales, which grew by 72% year-on-year [1]. - A 250,000-ton ductile iron pipe project in Egypt officially commenced construction in the first half of 2024, indicating the company's expansion efforts [1]. Financial Performance Summary - In Q2 2024, the company achieved a revenue of 9.607 billion yuan, a year-on-year decrease of 24.18%, but a quarter-on-quarter increase of 5.29% [1]. - The gross profit margin for ordinary steel and special steel products decreased by 24.17% year-on-year, while the gross profit margin for ductile iron pipe products decreased by 19.00% year-on-year [1]. - The average price of ball-milled ductile iron pipes was 6,598 yuan per ton, down 5.01% year-on-year [1]. Cost Management and Efficiency - The company has implemented cost reduction strategies, achieving a direct procurement rate of 83% for furnace materials and 82% for raw materials, optimizing costs compared to peers [2]. - The company has successfully reduced ductile iron pipe costs by 80 yuan per ton, showcasing effective cost management [2]. Profit Forecast and Valuation - The net profit forecasts for 2024-2026 have been revised downwards by 28.30%, 24.73%, and 23.26% respectively, with expected net profits of 1.007 billion yuan, 1.272 billion yuan, and 1.448 billion yuan [2]. - Despite the downward adjustment in profit forecasts, the company is expected to continue optimizing its product structure, which may enhance profitability in the future [2].