ZHENHUA(000733) 国盛证券·2024-09-04 00:12Investment Rating - The report maintains a "Buy" rating for the company [4]. Core Views - The company, a leading domestic military electronic components manufacturer, experienced a decline in performance in H1 2024 due to insufficient downstream demand and price reductions. However, it is expected to benefit from a recovery in downstream demand and an expansion of product varieties in the future [2][4]. - The company reported a significant drop in revenue and profitability in H1 2024, with revenue of 2.43 billion yuan, down 43.65% year-on-year, and a net profit of 420 million yuan, down 72.55% year-on-year [1][2]. Financial Summary - Income Statement: In H1 2024, the company achieved a revenue of 2.43 billion yuan, a decrease of 43.65% year-on-year. The net profit attributable to the parent company was 420 million yuan, down 72.55% year-on-year. The gross margin was 50.79%, down 11.68 percentage points year-on-year, and the net profit margin was 17.30%, down 18.20 percentage points year-on-year [1][2]. - Balance Sheet: Prepayments and inventory increased compared to the beginning of the period. Prepayments were 58 million yuan, up 13.87%, indicating increased raw material procurement. Inventory reached 2.285 billion yuan, up 8.99% [1]. - Cash Flow: The company reported operating cash flow of 1.568 billion yuan for 2024E, with a projected net profit of 1.1 billion yuan [9][11]. Earnings Forecast - The company’s net profit forecasts for 2024 to 2026 are 1.101 billion yuan, 1.433 billion yuan, and 1.795 billion yuan, respectively, with corresponding P/E ratios of 18X, 14X, and 11X [2][3].