Riyue HI(603218) 国金证券·2024-08-29 03:01Investment Rating - The report maintains an "Accumulate" rating for the company [2]. Core Views - The company reported a revenue of 1.79 billion RMB in the first half of 2024, a year-on-year decrease of 25.4%, while the net profit attributable to shareholders reached 422 million RMB, an increase of 44.7% [2]. - In Q2, the company achieved a revenue of 1.09 billion RMB, down 17.7% year-on-year, but the net profit attributable to shareholders surged by 109.4% to 335 million RMB, largely due to investment income from the transfer of wind farm equity amounting to 270 million RMB [2]. - The company’s gross margin for ductile iron products improved to 19.3%, up approximately 1.0 percentage points from the previous year, benefiting from product structure optimization and effective cost control [2]. - Contract liabilities increased significantly to 67 million RMB, up 0.65 billion RMB year-on-year, indicating a potential recovery in performance as wind farm construction is expected to pick up in the second half of the year [2]. - The company has initiated a futures trading business for bulk raw materials, with a maximum investment of 120 million RMB, aimed at mitigating price volatility risks of raw materials [2]. - The profit forecast for 2024-2026 has been adjusted to 730 million, 800 million, and 930 million RMB, respectively, with corresponding P/E ratios of 13, 12, and 10 [2]. Summary by Sections Financial Performance - The company’s revenue for 2022 was 4.865 billion RMB, with a projected decline to 4.639 billion RMB in 2024, followed by a recovery to 6.576 billion RMB in 2025 and 7.219 billion RMB in 2026 [4]. - The net profit attributable to shareholders is expected to grow from 482 million RMB in 2023 to 734 million RMB in 2024, 802 million RMB in 2025, and 930 million RMB in 2026 [4]. - The diluted earnings per share are projected to increase from 0.47 RMB in 2023 to 0.71 RMB in 2024, 0.78 RMB in 2025, and 0.90 RMB in 2026 [4]. Cost and Margin Analysis - The gross margin for the company’s main products is expected to stabilize around 19.3% in the near term, with effective cost management contributing to this stability [2]. - The company’s operating expenses, including sales and management expenses, have shown a decreasing trend, indicating improved cost control measures [2]. Market Outlook - The company anticipates a recovery in orders and performance in the second half of the year as the wind power installation season approaches, supported by increased contract liabilities [2]. - The introduction of futures trading for raw materials is expected to provide a hedge against price fluctuations, enhancing financial stability [2].