HONGLU(SZ:002541) Tianfeng Securities·2024-07-05 06:02Investment Rating - The report maintains a "Buy" rating for the company with a target price of 24.7 CNY, indicating an expected upside from the current price of 16.04 CNY [5][22]. Core Views - The company is expected to see steady growth in orders and production throughout the year, despite a slight decline in new orders in the first half of 2024 [1]. - The company's smart transformation is anticipated to enhance efficiency and reduce costs, contributing positively to its long-term growth potential [2]. - The increase in government subsidies is expected to bolster annual profits, with a significant year-on-year increase of 142% in Q2 2024 [2]. Summary by Sections Orders and Production - In the first half of 2024, the company signed new orders totaling approximately 14.356 billion CNY, a year-on-year decrease of 4.66%. The second quarter alone accounted for 7.391 billion CNY, down 5.87% year-on-year [1]. - The steel structure production for the first half of 2024 was about 2.1058 million tons, showing a slight increase of 0.12% year-on-year, with Q2 production at 1.1879 million tons, up 0.1% year-on-year [1]. Pricing and Market Conditions - The unit price of materials in Q2 2024 ranged from 4,900 to 6,200 CNY per ton, reflecting a decrease from the previous year's range of 4,830.5 to 7,275.8 CNY per ton, marking an average price drop of 8.13% [1]. - The steel price in Q2 2024 fell by 3.38% year-on-year, impacting the overall order volume, which is projected to decline by 3.37% compared to the previous year [1]. Financial Projections - The company anticipates a total production of 5.2 million tons for the year, with projected net profits for 2024-2026 estimated at 1.3 billion, 1.5 billion, and 1.7 billion CNY respectively, corresponding to P/E ratios of 8, 7, and 6 times [2]. - Revenue is projected to grow from 23.54 billion CNY in 2023 to 26.51 billion CNY in 2024, reflecting a growth rate of 12.63% [4].