Investment Rating - The report maintains an "OUTPERFORM" rating for Morimatsu International Holdings, with a target price of HKD 6.96, reflecting a potential upside from the current price of HKD 4.67 [2][20]. Core Insights - The company's FY24 revenue was CNY 6.95 billion, a decrease of 5.6% year-on-year, primarily due to delays in project execution. However, the gross profit margin improved to 29.5%, up 1.6 percentage points year-on-year, attributed to better operational efficiency and material cost control [3][4][16]. - The net profit attributable to shareholders for FY24 was CNY 737 million, down 12.7% year-on-year, mainly impacted by accounts receivable impairment [17][20]. - The company’s backlog at the end of FY24 was CNY 8.1 billion, down from CNY 8.8 billion at the end of 1H24, with new orders for FY24 totaling CNY 6.0 billion, reflecting a shift in project execution practices [5][18][20]. - Overseas revenue accounted for 60.4% of total revenue in FY24, with 70.6% of new orders being export orders, indicating stable international demand [6][19]. Financial Summary - Revenue projections for FY25 and FY26 have been revised down to CNY 7.77 billion and CNY 8.47 billion, respectively, with expected growth rates of 11.8% and 9.1% [8][20]. - The net profit forecasts for FY25 and FY26 have also been adjusted to CNY 872 million and CNY 939 million, suggesting growth rates of 18.3% and 7.7% [8][20]. - The report utilizes a discounted cash flow (DCF) model for valuation, maintaining a WACC of 10.6% and a perpetual growth rate of 2.5% [8][20].

Investment Rating - The report maintains an "OUTPERFORM" rating for Morimatsu International Holdings with a target price of HKD 6.96, reflecting a potential upside from the current price of HKD 4.67 [2][20]. Core Insights - The company's FY24 revenue was CNY 6.95 billion, a decrease of 5.6% year-on-year, primarily due to delays in project execution. However, the gross profit margin improved to 29.5%, up 1.6 percentage points year-on-year, attributed to better operational efficiency and material cost control [3][4][16]. - The net profit attributable to shareholders was CNY 737 million, down 12.7% year-on-year, mainly impacted by accounts receivable impairment [17][20]. Revenue Breakdown - Revenue from Mainland China was CNY 2.75 billion, down 29.2% year-on-year, while overseas revenue reached CNY 4.20 billion, an increase of 20.8% year-on-year. Notably, North America saw a significant growth of 60.2% year-on-year [3][16]. - By segment, the oil and gas sector generated CNY 630 million (-35.2% y-y), while the power battery segment reported CNY 1.22 billion (+6.5% y-y) [22]. Order Backlogs - As of the end of FY24, the company had a backlog of CNY 8.1 billion, down from CNY 8.8 billion in the first half of 2024. The pharmaceutical sector accounted for CNY 2.3 billion of this backlog [5][18]. - New orders for FY24 totaled CNY 6.0 billion, with a notable decline of 11.3% in the second half of the year [5][18]. Valuation Adjustments - Due to weak backlog growth, revenue forecasts for FY25 and FY26 have been revised down to CNY 7.77 billion and CNY 8.47 billion, respectively, indicating growth rates of 11.8% and 9.1% year-on-year [8][20]. - The net profit forecasts for FY25 and FY26 have also been adjusted to CNY 872 million and CNY 939 million, suggesting growth rates of 18.3% and 7.7% year-on-year [8][20].

Group 1 - The rental index for aerial work platforms in February 2025 is projected to be 350 points, reflecting a month-on-month decrease of 21.4% but a year-on-year increase of 34.1% [1] - Excavator sales in March 2025 are expected to reach 28,500 units, representing a year-on-year increase of 14%, with domestic sales of 18,500 units (up 22% year-on-year) and exports of 10,000 units (up 2% year-on-year) [1] - Cumulative excavator domestic sales from January to March 2025 are projected at 35,545 units (up 34% year-on-year), while cumulative exports are expected to be 24,737 units (up 5% year-on-year), indicating a marginal recovery in both domestic and international demand [1] Group 2 - Dongwu Securities predicts that the improvement in excavator sales is primarily due to the replacement of aging equipment, as the previous upcycle lasted from 2015 to 2023, with an average lifespan of 8-10 years for excavators [1] - The financial environment has improved since Q4 2024, providing support for both existing and new projects, which is expected to further bolster demand for excavators [1] - The report anticipates that high growth in water conservancy investment will support small excavators, while stabilization in real estate and infrastructure development will benefit medium-sized excavators, and stable demand from mining will support large excavators [1] Group 3 - Pacific Securities reports that the export data for excavator products in January and February 2025 continues to show high year-on-year growth, contributing significantly to the profits of major manufacturers [2] - The positive trend in exports is expected to enhance profit margins for manufacturers, with a favorable overseas demand environment anticipated to positively impact their performance [2] - The engineering machinery sector is viewed positively by the market, with expectations of continued growth in exports and overall industry performance [2] Group 4 - Related Hong Kong-listed companies in the engineering machinery sector include Zoomlion Heavy Industry (000157), China Longgong (03339), First Tractor Company (00038), Sany International (00631), Zhengzhou Coal Mining Machinery (601717), China National Heavy Duty Truck Group (000951), Weichai Power (000338), and Sany International (02155) [3]

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 6,948,354,000, a decrease of 5.6% from RMB 7,360,262,000 in 2023[3] - Gross profit for the same period was RMB 2,049,777,000, with a gross margin of 29.5%, up from 27.9% in 2023[3] - Net profit decreased to RMB 729,881,000, resulting in a net profit margin of 10.5%, down from 11.4% in the previous year[3] - New order amount signed was RMB 5,968,901,000, a decline of 23.3% compared to RMB 7,784,856,000 in 2023[3] - EBITDA for the year was RMB 1,116,488,000, slightly down from RMB 1,143,066,000 in 2023[3] - Basic earnings per share decreased to RMB 0.62 from RMB 0.73 in 2023[4] - The company’s operating profit for the year ended December 31, 2024, was impacted by the decline in revenue from core equipment and mainland China[25] - The company's pre-tax profit decreased from RMB 984,334 million in 2023 to RMB 911,254 million in 2024, a decline of approximately 7.4%[30] - Net profit decreased by approximately 13.4% from RMB 842,548 thousand for the year ending December 31, 2023, to approximately RMB 729,881 thousand for the year ending December 31, 2024, resulting in a net profit margin of 10.5%[119] Assets and Equity - Total assets as of December 31, 2024, were RMB 6,079,286,000, a decrease from RMB 6,393,979,000 in 2023[7] - Non-current assets increased to RMB 2,829,047,000 from RMB 2,538,097,000 in 2023[7] - Cash and bank deposits rose to RMB 2,595,448,000, compared to RMB 2,168,682,000 in the previous year[7] - Total equity increased to RMB 5,275,856,000 from RMB 4,390,609,000 in 2023[8] - Total equity increased from RMB 1,174,240,000 at the beginning of 2023 to RMB 2,108,355,000 by the end of 2023, reflecting a growth of approximately 79.2%[54] Revenue Breakdown - Revenue from core equipment decreased to RMB 2,525,033,000 in 2024 from RMB 2,590,675,000 in 2023, representing a decline of 2.5%[15] - Revenue from mainland China decreased significantly to RMB 2,750,519,000 in 2024 from RMB 3,886,406,000 in 2023, a decline of 29.2%[22] - Revenue from North America increased to RMB 1,383,524,000 in 2024, up 60.0% from RMB 863,532,000 in 2023[22] - The total expected revenue from existing customer contracts as of December 31, 2024, is RMB 8,131,050,000, down from RMB 9,077,735,000 in 2023, indicating a decrease of 10.4%[19] Costs and Expenses - Interest expenses on borrowings decreased from RMB 12,369 million in 2023 to RMB 8,500 million in 2024, a reduction of approximately 31%[26] - Employee costs increased from RMB 1,028,502 million in 2023 to RMB 1,063,233 million in 2024, representing a rise of about 3.4%[26] - Research and development costs decreased from RMB 418,149 million in 2023 to RMB 399,241 million in 2024, a decline of approximately 4.5%[28] - The total inventory cost decreased from RMB 5,304,558 million in 2023 to RMB 4,898,577 million in 2024, a reduction of about 7.7%[28] - Current tax expense increased from RMB 130,131 million in 2023 to RMB 168,301 million in 2024, an increase of approximately 29.3%[29] - The actual tax expense for 2024 was RMB 181,373 million, compared to RMB 141,786 million in 2023, reflecting an increase of about 28%[30] Shareholder Information - The company plans to distribute dividends amounting to RMB 280,000,000, with a deferred tax liability of RMB 28,000,000 due to a 10% withholding tax rate[37] - The company declared a dividend of RMB 110,810,000 for the year ended December 31, 2024, with a proposed dividend of RMB 182,926,000 for the subsequent period[62] - The board proposed a final dividend of HKD 0.15 per share for the year ending December 31, 2024, subject to shareholder approval[141] Strategic Focus and Development - The company plans to enhance its competitive advantage through diversification, globalization, and intelligent solutions as part of its corporate strategy[63] - The company aims to focus on sustainable development in its growth strategy, emphasizing resource allocation and talent cultivation[65] - The company has a strategic focus on advanced manufacturing and engineering services, with a commitment to innovation in energy and materials[64] - The company aims to transition from providing price advantages to creating value advantages for customers, enhancing its competitive edge[66] - The company is exploring service-oriented manufacturing models to support sustainable development in downstream industries[67] - The company aims to avoid reliance on single products or markets, continuously updating core technologies and products to maintain competitive advantages[73] Market and Customer Insights - Approximately 70% of the company's annual customers are repeat clients, including global multinational corporations and regional leaders[90] - The company has successfully entered the global supply chains of leading enterprises in oil and gas refining, chemicals, pharmaceuticals, and battery raw materials, achieving multiple first-time exports of similar products from China[82] - The company is concentrating on overseas market expansion while controlling domestic personnel and hardware development[97] Corporate Governance - The board is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[146] - KPMG was appointed as the auditor for the company during the reporting period, with no changes in auditors over the past three years[150] - The financial statements have been verified by the auditor and are consistent with the group's consolidated financial statements[151]

Financial Performance - Morimatsu International Holdings reported a revenue increase of 15% year-over-year, reaching HKD 500 million for the first half of 2024[5]. - The company achieved a net profit margin of 12%, translating to a net profit of HKD 60 million, compared to HKD 50 million in the same period last year[5]. - The company reported a significant increase in capital expenditures, amounting to HKD 150 million, primarily for upgrading existing facilities[5]. - The company’s revenue decreased by approximately 5.8%, from about RMB 3,691,759 thousand for the six months ended June 30, 2023, to about RMB 3,476,752 thousand for the six months ended June 30, 2024, primarily due to a reduction in orders in the pharmaceutical and biopharmaceutical sectors influenced by external economic conditions[49]. - Total revenue for the six months ended June 30, 2024, was approximately RMB 3,476,752 thousand, a decrease of 5.8% compared to RMB 3,691,759 thousand for the same period in 2023[50]. - Gross profit for the six months ended June 30, 2024, was approximately RMB 1,028,448 thousand, representing a gross margin of 29.6%, an increase of 1.9% from RMB 1,009,092 thousand in the same period last year[52]. - The net profit for the six months ended June 30, 2024, was approximately RMB 373,827,000, a decrease of about 11.3% compared to RMB 421,029,000 for the same period in 2023[62]. - The company reported a total comprehensive income of RMB 371,199,000 for the six months ended June 30, 2024, down from RMB 455,105,000 in the previous year[129]. Research and Development - Morimatsu is investing HKD 100 million in R&D for new biopharmaceutical technologies, aiming to launch two new products by Q4 2024[5]. - Research and development expenses rose by 30.3% to RMB 219,020 thousand, up from RMB 168,090 thousand, reflecting increased investment in new technologies and business development[57]. - The company has developed a strong design and R&D capability, enabling it to provide customized services such as joint R&D, technical consulting, and digital operation support[19]. - The company’s comprehensive technical foundation involves chemical engineering, biological engineering, and computer science, supporting its R&D and project execution[23]. - The company’s R&D employee costs were RMB 107,820,000 for the six months ended June 30, 2024, compared to RMB 89,549,000 for the same period in 2023, reflecting an increase of 20.4%[146]. Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 25% growth in that region by the end of 2025[5]. - The management provided an optimistic outlook, projecting a revenue growth of 20% for the full year 2024[5]. - The company has outlined a strategic goal to increase production capacity by 30% over the next two years through new facility investments[5]. - The company is exploring potential acquisitions in the biopharmaceutical sector to enhance its product offerings and market share[5]. - The company aims to provide competitive products and comprehensive solutions for the global health industry, leveraging its extensive project experience in international capital expenditure projects[41]. Operational Efficiency - Morimatsu's cash flow from operations improved by 18%, totaling HKD 80 million, reflecting better operational efficiency[5]. - The cost of sales decreased by 8.7% to RMB 2,448,304 thousand from RMB 2,682,667 thousand, driven by lean production improvements and cost reduction measures[52]. - The company’s focus on modular solutions and continuous innovation aims to optimize project execution and reduce risks associated with project management[29]. International Presence - The company has established subsidiaries and offices in various countries, including China, Japan, India, Italy, Singapore, Sweden, the United States, Mexico, and Malaysia, to enhance its international presence[20]. - The company operates a fully-owned subsidiary in China, established on November 29, 2001[13]. - The company launched a new subsidiary, Morimatsu T&S, in Japan on November 27, 2023[13]. Financial Position - Cash and cash equivalents as of June 30, 2024, were approximately RMB 1,939,218,000, a decrease of about RMB 229,464,000 from RMB 2,168,682,000 as of December 31, 2023[65]. - Total liabilities decreased to RMB 3,556,253 thousand from RMB 4,271,013 thousand, reflecting a reduction of 16.7%[126]. - The company's equity attributable to shareholders rose to RMB 4,764,162 thousand from RMB 4,382,491 thousand, a growth of 8.7%[127]. - The company reported retained earnings of RMB 2,025,151 thousand as of June 30, 2024, up from RMB 1,602,805 thousand, reflecting a growth of 26.3%[128]. Shareholder Information - The largest shareholder, Senmatsu Holdings, owns 750,000,000 shares, representing 61.82% of the total shares[82]. - The company has a total of 1,213,277,800 shares issued as of June 30, 2024[83]. - The stock options plan allows for a maximum of 132,380,000 shares to be issued, which is approximately 10.91% of the total shares[88]. - The company’s directors and senior management hold a total of 16,810,000 shares, accounting for 1.39% of the total shares[85]. Risk Management - The company faces foreign exchange risks primarily from holding foreign currency deposits and trade receivables, and it employs forward foreign exchange contracts to manage this risk[79]. - The company has a comprehensive credit control policy to assess customer creditworthiness and ensure adequate provisions for expected credit losses[80].

Restricted Share Unit Plan - The purchase price for exercising a restricted share unit is determined by the board of directors, considering factors such as the closing price of shares before the grant date, the purpose of the restricted share unit plan, and the group's financial condition and valuation [1] - The board of directors has the discretion to determine the purchase price for restricted share units [1] - The restricted share unit plan details are supplementary to the annual reports for the years ending December 31, 2022, and December 31, 2023 [1] Compliance and Disclosure - The announcement is made in compliance with Chapter 17 of the Listing Rules to disclose additional information regarding the restricted share unit plan [1] - The supplementary information provided in the announcement does not affect the other information contained in the annual reports [1]

Investment Rating - The report maintains an **Outperform** rating for Morimatsu International Holdings (2155 HK) with a target price of HKD 7.24, revised down by 29% [8][6] Core Views - The company's revenue growth in 1H24 missed expectations, with total revenue of CNY 3.48 billion, down 5.8% YoY, primarily due to weak downstream demand and delayed revenue recognition from certain projects [2][6] - Overseas revenue grew significantly, reaching CNY 1.95 billion, up 37.2% YoY, accounting for 56% of total revenue, with Asia (excluding China) contributing CNY 1.01 billion, up 92.9% YoY [2][6] - Gross margin improved to 29.6%, up 0.3 ppts YoY, driven by product mix optimization and refined management [2][6] - Net profit attributable to shareholders declined 10.9% YoY to CNY 376 million, impacted by accounts receivable impairment of CNY 50 million [3][6] Revenue Breakdown - **By Segment**: - Oil & Gas: CNY 461 million, up 108.2% YoY [2] - Power Battery Materials: CNY 651 million, up 40.4% YoY [2] - Electronic Chemicals: CNY 660 million, flat YoY [2] - Chemicals: CNY 704 million, down 9.0% YoY [2] - Pharmaceuticals: CNY 664 million, down 49.7% YoY [2] - Daily Chemicals: CNY 92 million, down 50.0% YoY [2] - **By Region**: - China: CNY 1.52 billion, down 32.8% YoY [2] - Overseas: CNY 1.95 billion, up 37.2% YoY [2] Order Analysis - Backlog: Total backlog stood at CNY 8.78 billion as of 1H24, down 3.3% from the end of 2023, with pharmaceuticals accounting for 30.2% and chemicals for 21.6% [4][6] - New Orders: New signed orders in 1H24 were CNY 3.16 billion, down 35.7% YoY but up 10.5% sequentially, with Power Battery Materials contributing CNY 1.02 billion [4][6] - Overseas Orders: 76% of new orders were from overseas, up from 70% in 2023, with 70% of the total backlog being overseas orders [6] Profit Forecast - Revenue forecasts for FY24/25/26 were revised down to CNY 8.11 billion, CNY 9.06 billion, and CNY 10.12 billion, implying YoY growth of 10.2%, 11.7%, and 11.7% respectively [7] - Net profit attributable to shareholders for FY24/25/26 is expected to be CNY 879 million, CNY 992 million, and CNY 1.15 billion, with YoY growth of 4.1%, 12.9%, and 15.6% respectively [7] Valuation - The target price was revised down to HKD 7.24 using a DCF model, with WACC adjusted to 10.6% (previously 8.7%) and a perpetual growth rate of 2.5% [8] - The stock is currently trading at FY24/FY25 P/E ratios of 5.2x and 4.8x respectively [8]

Investment Rating - Buy (Maintained) [2] Core Views - The company reported a revenue of RMB 3.477 billion (yoy -5.8%) and a net profit of RMB 374 million (yoy -11.2%) for the first half of 2024 [2] - The decline in revenue is primarily due to reduced orders in the pharmaceutical and biopharmaceutical sectors, impacted by external economic conditions [2] - The company's gross profit margin improved to 29.58%, up 2.25 percentage points year-on-year [2] - EBITDA stood at RMB 556 million (yoy -3%) [2] Business Analysis Revenue Breakdown - Pharmaceutical and Biopharmaceutical: RMB 660 million (yoy -49.7%) [3] - Electronic Chemicals: RMB 660 million (yoy +0.4%) [3] - Power Battery Materials: RMB 650 million (yoy -40.4%) [3] - Chemical: RMB 700 million (yoy -9.0%) [3] - Oil & Gas Refining: RMB 460 million (yoy +108.2%) [3] - Daily Chemicals: RMB 90 million (yoy -50%) [3] - Others: RMB 240 million (yoy +236.0%) [3] New Orders - Total new orders: RMB 3.164 billion [3] - Electronic Chemicals: RMB 170 million (yoy -53.4%) [3] - Chemical: RMB 530 million (yoy -27.0%) [3] - Daily Chemicals: RMB 300 million (yoy +40%) [3] - Power Battery Materials: RMB 1.02 billion (yoy +23.2%) [3] - Oil & Gas Refining: RMB 380 million (yoy +21.8%) [3] - Pharmaceutical and Biopharmaceutical: RMB 590 million (yoy -71.0%) [3] - Others: RMB 160 million (yoy -61.7%) [3] Backlog - Total backlog: RMB 8.776 billion [3] Overseas Business - Overseas sales accounted for 56% of total revenue, 70% of the backlog, and 76% of new orders [3] - The company is actively expanding in the clean energy sector, particularly in green ammonia, with a projected global market size of USD 5.48 billion by 2030 [3] Financial Projections - Expected net profit for 2024-2026: RMB 904 million, RMB 1.037 billion, and RMB 1.253 billion, respectively [3] - Corresponding PE ratios: 5x, 4x, and 4x [3] Key Financial Metrics Revenue Growth - 2023A: 13.47% [5] - 2024E: 2.90% [5] - 2025E: 10.59% [5] - 2026E: 18.74% [5] Net Profit Growth - 2023A: 26.21% [5] - 2024E: 7.00% [5] - 2025E: 14.75% [5] - 2026E: 20.81% [5] ROE - 2023A: 19.27% [5] - 2024E: 17.10% [5] - 2025E: 16.40% [5] - 2026E: 16.54% [5] EPS - 2023A: RMB 0.696 [5] - 2024E: RMB 0.745 [5] - 2025E: RMB 0.855 [5] - 2026E: RMB 1.033 [5] Operating Cash Flow per Share - 2023A: RMB 0.553 [5] - 2024E: RMB 0.599 [5] - 2025E: RMB 0.936 [5] - 2026E: RMB 0.978 [5] Balance Sheet Highlights Total Assets - 2023A: RMB 8.932 billion [6] - 2024E: RMB 9.897 billion [6] - 2025E: RMB 11.366 billion [6] - 2026E: RMB 13.365 billion [6] Total Liabilities - 2023A: RMB 4.541 billion [6] - 2024E: RMB 4.603 billion [6] - 2025E: RMB 5.034 billion [6] - 2026E: RMB 5.780 billion [6] Shareholders' Equity - 2023A: RMB 4.382 billion [6] - 2024E: RMB 5.286 billion [6] - 2025E: RMB 6.323 billion [6] - 2026E: RMB 7.576 billion [6] Profitability Ratios Gross Margin - 2023A: 27.9% [6] - 2024E: 29.7% [6] - 2025E: 29.9% [6] - 2026E: 30.0% [6] Operating Margin - 2023A: 12.5% [6] - 2024E: 13.9% [6] - 2025E: 14.3% [6] - 2026E: 14.5% [6] Net Margin - 2023A: 11.5% [6] - 2024E: 11.9% [6] - 2025E: 12.4% [6] - 2026E: 12.6% [6] Cash Flow Analysis Operating Cash Flow - 2023A: RMB 671 million [6] - 2024E: RMB 727 million [6] - 2025E: RMB 1.136 billion [6] - 2026E: RMB 1.186 billion [6] Investing Cash Flow - 2023A: RMB -408 million [6] - 2024E: RMB -67 million [6] - 2025E: RMB -68 million [6] - 2026E: RMB -66 million [6] Financing Cash Flow - 2023A: RMB 507 million [6] - 2024E: RMB 4 million [6] - 2025E: RMB -3 million [6] - 2026E: RMB -3 million [6] Valuation Metrics P/E Ratio - 2023A: 5.47x [5] - 2024E: 5.11x [5] - 2025E: 4.46x [5] - 2026E: 3.69x [5] P/B Ratio - 2023A: 1.05x [5] - 2024E: 0.87x [5] - 2025E: 0.73x [5] - 2026E: 0.61x [5]

Key Points 1. Event Introduction - **Industry/Company**: Shensong International - **Event**: 2024 Q2 Earnings Release Conference Call - **Participants**: Investors, Management Team - **Moderator**: Jinmen Finance, Liu Teacher - **Time**: Evening - **Source**: <doc id='1'>1</doc> 2. Opening Remarks - **Industry/Company**: Shensong International - **Content**: Welcome message from the moderator, thanking participants for joining the conference call. - **Source**: <doc id='1'>1</doc>

Revenue and Profitability - Revenue for the six months ended June 30, 2024, was RMB 3,476,752,000, a decrease of 5.8% compared to RMB 3,691,759,000 for the same period in 2023[2] - Net profit for the period was RMB 373,827,000, down 11.2% from RMB 421,029,000 in the prior year, with a net profit margin of 10.8%[2] - The company reported a total comprehensive income of RMB 368,564,000 for the period, down from RMB 453,114,000 in the previous year[4] - Basic earnings per share decreased to RMB 0.32 from RMB 0.37, while diluted earnings per share fell to RMB 0.30 from RMB 0.34[2] - The company's EBITDA decreased by approximately 3.0% from RMB 573,450 thousand to RMB 556,094 thousand for the six months ended June 30, 2024[71] Revenue Breakdown - Revenue from traditional pressure equipment increased to RMB 1,249,383 thousand, up 16.8% from RMB 1,069,274 thousand in the previous year[14] - Revenue from reactors rose to RMB 664,387 thousand, a significant increase of 46% compared to RMB 455,349 thousand in 2023[14] - Revenue from heat exchangers was RMB 351,164 thousand, showing a slight increase of 7.6% from RMB 326,208 thousand in the previous year[14] - Revenue from modular pressure equipment decreased to RMB 2,143,433 thousand, down 16% from RMB 2,551,515 thousand in 2023[14] - Revenue from mainland China was RMB 1,524,316 thousand, a decrease of 32.7% from RMB 2,268,690 thousand in the previous year[17] - Revenue from North America increased to RMB 549,514 thousand, up 10.9% from RMB 495,623 thousand in 2023[17] Assets and Liabilities - Total assets less current liabilities increased to RMB 5,139,379,000 from RMB 4,661,063,000 as of December 31, 2023[6] - Non-current assets, including property, plant, and equipment, rose to RMB 2,681,476,000 from RMB 2,538,097,000[5] - Current liabilities decreased to RMB 3,556,253,000 from RMB 4,271,013,000, indicating improved liquidity[6] - Trade receivables as of June 30, 2024, amounted to RMB 1,229,060,000, an increase from RMB 1,106,792,000 as of December 31, 2023[33] - Trade payables as of June 30, 2024, were RMB 1,061,756,000, down from RMB 1,254,536,000 as of December 31, 2023[35] Expenses and Costs - Total employee costs decreased slightly to RMB 602,932,000 in the first half of 2024 from RMB 626,217,000 in 2023, a reduction of 4%[20] - Research and development costs reached RMB 219,020,000 in the first half of 2024, compared to RMB 168,090,000 in the same period of 2023, reflecting a growth of 30%[22] - The company's pre-tax profit was impacted by an increase in tax provision to RMB 113,261,000 for the six months ended June 30, 2024, compared to RMB 68,968,000 in 2023, an increase of 64%[24] - The actual tax expense for the six months ended June 30, 2024, was RMB 93,660,000, compared to RMB 75,401,000 in 2023, reflecting an increase of 24%[24] - Inventory costs decreased to RMB 2,448,304,000 in the first half of 2024, down from RMB 2,682,667,000 in 2023, a decline of 9%[22] Shareholder Activities - The company declared an interim dividend of RMB 200,000,000 for the six months ended June 30, 2024, compared to RMB 50,000,000 for the same period in 2023[37] - A total of 4,676,227 stock options were exercised in the six months ended June 30, 2024, resulting in an increase in share capital of RMB 10,712,000[40] - The company repurchased and canceled a total of 1,592,000 shares at prices ranging from HKD 4.30 to HKD 6.18 during the six months ended June 30, 2024[41] Acquisitions and Investments - The group acquired a 49% stake in Morimatsu Dialog for a cost of RMB 55,176,000, with a subsequent investment of RM 31,110,000 (approximately RMB 46,251,000) in April 2024[43] - In June 2024, the group completed the acquisition of 100% equity in SenSong Biotechnology for RMB 12,755,000, following a capital injection of RMB 7,475,000 from non-controlling shareholders[43] - The group also acquired 100% equity in SenZhong Biotechnology for RMB 16,800,000, with RMB 6,800,000 paid by June 30, 2024[43] - The company completed the acquisition of 100% equity in Shandong Keda Chemical Engineering Co., Ltd. on March 15, 2024[80] Market Trends and Future Outlook - The group aims to provide leading core equipment and high-value process solutions, focusing on "health," "green," and "smart" development themes[44] - Long-term trends indicate that global policies favoring new energy vehicles will continue, providing a supportive environment for the group's business growth[51] - The demand for semiconductor-grade wet electronic chemicals in China is projected to reach 1.385 million tons by 2025, driven by the expansion of 12-inch wafer production lines[52] - The company's manufacturing base in Malaysia is undergoing expansion with a total investment of approximately USD 60 million, expected to be completed by Q1 2025[55] Other Financial Metrics - Government grants increased significantly to RMB 12,761,000 in the six months ended June 30, 2024, compared to RMB 3,368,000 in the same period of 2023, representing a growth of 278%[19] - Interest income rose to RMB 25,697,000 for the six months ended June 30, 2024, up from RMB 21,626,000 in 2023, marking an increase of 18%[19] - Other income rose significantly from RMB 14,121 thousand to RMB 60,689 thousand, primarily due to increased foreign exchange gains and higher interest income from deposits[64]