WEIXING(SZ:002003) EBSCN·2024-08-15 00:37Investment Rating - The report maintains a "Buy" rating for the company with a current price of 12.08 CNY [1][2]. Core Insights - The company reported better-than-expected performance in the first half of 2024, with revenue and net profit attributable to shareholders increasing by 25.6% and 37.8% year-on-year, respectively [1]. - The company's revenue for the first half of 2024 reached 23.0 billion CNY, while the net profit attributable to shareholders was 4.2 billion CNY, with an EPS of 0.35 CNY and a proposed cash dividend of 0.2 CNY per share [1]. - The growth in profit outpaced revenue due to improvements in gross margin, a decrease in expense ratio, and an increase in other income, leading to a net profit margin increase of 1.6 percentage points to 18.1% [1]. - The company’s production capacity utilization rate improved by 13.6 percentage points year-on-year to 70.7% in the first half of 2024, with domestic and international capacity utilization rates at 75.5% and 49.6%, respectively [1]. Summary by Sections Financial Performance - The company achieved a revenue of 3,628 million CNY in 2022, projected to grow to 5,755 million CNY by 2026, with a compound annual growth rate of approximately 10.09% [3][4]. - The net profit attributable to shareholders is expected to rise from 489 million CNY in 2022 to 921 million CNY by 2026, reflecting a growth rate of 12.16% [3][4]. - The EPS is projected to increase from 0.42 CNY in 2022 to 0.79 CNY by 2026, with corresponding PE ratios decreasing from 29 to 15 [3][4]. Operational Highlights - The company’s international business revenue grew by 27.2% year-on-year, contributing to 33.1% of total revenue in the first half of 2024 [1]. - The company has successfully launched its industrial park in Vietnam, enhancing its international marketing network and client development [1]. Profitability Metrics - The gross margin for the first half of 2024 improved by 0.6 percentage points to 41.8%, with specific margins for buttons and zippers at 42.1% and 42.9%, respectively [1]. - The expense ratio decreased by 0.9 percentage points to 20.1%, with sales, management, and R&D expense ratios showing varied changes [1]. Future Outlook - The company has adjusted its profit forecasts for 2024-2026, increasing the net profit estimates by 7% for each year, with projected EPS of 0.61, 0.70, and 0.79 CNY for 2024, 2025, and 2026, respectively [2].