Hongfa(600885)2024-08-14 09:00Investment Rating - The investment rating for the company is "Accumulate" [1][4] Core Views - The company reported a year-on-year revenue growth of 15.33% for the first half of 2024, achieving a revenue of RMB 7.23 billion and a net profit of RMB 844 million [4][6] - The main relay business has shown solid growth, with a revenue of RMB 6.49 billion, reflecting an 8% increase year-on-year [4][6] - The overall gross margin slightly decreased to 34.78%, while the net profit margin improved to 15.31% [4][6] Summary by Sections Financial Performance - In H1 2024, the company achieved a revenue of RMB 7.23 billion, up 8.89% year-on-year, and a net profit of RMB 844 million, up 15.33% year-on-year [4][6] - The gross margin decreased by 0.97 percentage points to 34.78%, while the net profit margin increased by 0.46 percentage points to 15.31% [4][6] - The company’s operating efficiency improved, with per capita sales collection rising by 9.1% to RMB 602,000 [4][6] Business Segments - The main relay business maintained a stable market share, with a revenue of RMB 6.49 billion, up 8% year-on-year, despite a slight decline in gross margin to 36.15% [4][6] - The electrical products segment saw a revenue decline of 3.98% to RMB 405 million, attributed to a sluggish domestic construction distribution market [4][6] - New product categories such as film capacitors and current sensors experienced significant growth, with shipment volumes increasing by 20%, 118%, and 129% respectively [4][6] Valuation - The earnings per share (EPS) estimates for 2024-2026 have been adjusted to RMB 1.59, RMB 1.83, and RMB 2.09 respectively, with corresponding price-to-earnings ratios of 17.7, 15.4, and 13.5 [4][5] - The company’s total market capitalization is approximately RMB 29.34 billion [3]