BOMESC(SH:603727) HTSC·2024-07-28 10:02Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 17.79, up from the previous target of RMB 17.60 [12][20][14]. Core Insights - The company achieved a significant turnaround in profitability, with a net profit of RMB 0.63 billion in the first half of 2024, an increase of RMB 1.34 billion year-on-year [12][20]. - The gross margin improved to 16.6% in the first half of 2024, reflecting an increase of 11.2 percentage points year-on-year, indicating enhanced profitability [10][12]. - The company is recognized as a leading global offshore module builder, with a strong order backlog and ongoing project execution, particularly in FPSO (Floating Production Storage and Offloading) projects [14][13]. Financial Performance - In the first half of 2024, the company reported operating revenue of RMB 1.061 billion, a year-on-year increase of 17.8% [12]. - The net profit for Q2 2024 was RMB 0.29 billion, showing an increase of RMB 0.82 billion year-on-year, despite a slight decline in revenue [12]. - The company expects net profits for 2024, 2025, and 2026 to be RMB 1.31 billion, RMB 2.86 billion, and RMB 4.28 billion, respectively [12][14]. Valuation Metrics - The report assigns a price-to-book (PB) ratio of 1.5x for 2024, compared to a peer average of 1.3x, reflecting the company's premium valuation due to its market leadership [12][14]. - The company's book value per share (BPS) is projected to be RMB 11.86, RMB 12.88, and RMB 14.40 for 2024, 2025, and 2026, respectively [12][14]. Operational Highlights - The company has successfully completed various quality certification audits, enhancing its manufacturing capabilities and operational efficiency [13]. - The execution of the UARU FPSO project is progressing ahead of schedule, receiving positive feedback from clients [13].