SUMEC(600710) 浙商证券·2024-10-30 00:23Investment Rating - The report initiates coverage on SUMEC (600710) with an "Overweight" rating, indicating a positive outlook on the stock's performance relative to the market [5][7] Core Views - SUMEC has demonstrated steady growth driven by its dual-wheel strategy of industrial chain and supply chain operations, with a diversified business model covering environmental protection, advanced manufacturing, and consumer sectors [1][3] - The company's advanced manufacturing segment, particularly shipbuilding, is benefiting from industry tailwinds, with a significant increase in orders and a robust order book extending to 2028 [4][5] - SUMEC's supply chain operations, while impacted by commodity price fluctuations, remain a key revenue driver, contributing 74% of total revenue in 2023 [1][3] - The company has maintained a consistent dividend policy, with a payout ratio of 42% in 2023, reflecting its commitment to shareholder returns [3][7] Business Segments Summary Industrial Chain Operations - The industrial chain segment, comprising environmental protection, advanced manufacturing, and consumer businesses, contributed 21% of total revenue and 68% of gross profit in 2023 [1][3] - Advanced manufacturing, particularly shipbuilding, saw a 94% YoY increase in orders in H1 2024, with 82 vessels in the order book as of H1 2024 [4][5] - The environmental protection segment, focused on clean energy and ecological projects, accounted for 5% of revenue and 16% of gross profit in 2023 [1][3] - The consumer segment, including apparel, home textiles, and branded school uniforms, contributed 9% of revenue and 33% of gross profit in 2023 [1][3] Supply Chain Operations - Supply chain operations, primarily involving commodity trading and electromechanical equipment import/export, accounted for 74% of revenue and 26% of gross profit in 2023 [1][3] - Despite a 19% YoY decline in supply chain revenue in H1 2024, the segment remains a critical component of SUMEC's business, with efforts to optimize product and customer structures [3][5] Financial Performance and Forecast - In H1 2024, SUMEC reported revenue of RMB 55.9 billion, down 13.3% YoY, but net profit attributable to shareholders increased by 12.12% YoY to RMB 570 million [3][5] - The company is expected to achieve revenue of RMB 120.4 billion, RMB 132 billion, and RMB 139.2 billion in 2024, 2025, and 2026, respectively, with net profit growth of 9.41%, 8.45%, and 10.44% over the same period [5][7] - SUMEC's valuation multiples (PE ratios of 10.94x, 10.09x, and 9.13x for 2024-2026) are below the industry average, suggesting potential undervaluation [5][7] Industry and Competitive Position - SUMEC's shipbuilding business, particularly its "Crown" series of bulk carriers, has gained a strong reputation in the market, with its subsidiary New Dayang Shipbuilding ranking first globally in handymax bulk carrier orders [4][5] - The company's supply chain operations benefit from its integration of upstream and downstream resources, with a focus on digital transformation to enhance efficiency and mitigate risks [47][49] - SUMEC's diversified business model and strong market position in multiple sectors provide resilience against industry cyclicality [1][3]