Xianheng International(605056) 民生证券·2024-08-29 09:30Investment Rating - The report maintains a "Recommend" rating for the company [5] Core Views - The company's profitability has improved quarter by quarter, with MRO centralized procurement becoming a major trend [2] - The company continues to deepen its presence in the power industry while rapidly expanding into new sectors, achieving steady revenue growth [2] - Non-standard product proportion has increased, driving a sequential improvement in gross margin, and cost reduction and efficiency enhancement have further boosted profitability [3] - The company is accelerating its push into the robotics field, aiming to establish itself as a high-tech product service provider [3] Financial Performance Summary Revenue and Profit - In H1 2024, the company achieved revenue of RMB 1.184 billion, up 18.26% YoY, with net profit attributable to shareholders of RMB 43 million, up 25.07% YoY [2] - In Q2 2024, revenue was RMB 746 million, up 18.79% YoY, with net profit attributable to shareholders of RMB 34 million, up 60.01% YoY [2] - The company's gross margin and net margin in H1 2024 were 28.31% and 3.7%, respectively, with a slight YoY decline in gross margin but a slight increase in net margin [3] Segment Performance - By industry: Power industry revenue was RMB 688 million, accounting for 58.09% of total revenue, up 23.8% YoY, while other industries contributed RMB 491 million, up 10.45% YoY [2] - By product: Tool products revenue increased by 27.14% YoY to RMB 827 million, accounting for 69.82% of total revenue, while instrument and technical service revenues grew by 4.81% and declined by 17.43%, respectively [2] Future Projections - Revenue is expected to grow to RMB 3.566 billion in 2024, RMB 4.3 billion in 2025, and RMB 5.106 billion in 2026, with YoY growth rates of 21.8%, 20.6%, and 18.8%, respectively [4] - Net profit attributable to shareholders is projected to be RMB 212 million in 2024, RMB 288 million in 2025, and RMB 370 million in 2026, with YoY growth rates of 119.2%, 35.9%, and 28.4%, respectively [4] Strategic Initiatives - The company is implementing a "Four Major Armies" strategy to expand horizontally and leverage the trend of state-owned enterprises' online procurement [3] - The company is expected to deepen its understanding of newly expanded sectors, with an increase in non-standard product proportion driving gross margin improvement [3] Valuation Metrics - The company's PE ratio is projected to be 19X in 2024, 14X in 2025, and 11X in 2026 [4] - The PB ratio is expected to be 2.4X in 2024, 2.2X in 2025, and 2.0X in 2026 [4]