PRCO(002225) 光大证券·2024-08-19 00:39Investment Rating - The report maintains a "Buy" rating for the company, with a target profit forecast for 2024-2026 of 2.85 billion, 3.40 billion, and 3.97 billion respectively, corresponding to P/E ratios of 12, 10, and 9 [2]. Core Insights - The company's revenue for the first half of 2024 was 2.7 billion, with a year-on-year increase of 2.5%. However, the net profit attributable to shareholders decreased by 8.2% to 130 million, and the net profit after deducting non-recurring gains and losses fell by 27.4% to 100 million [2]. - The company experienced a significant improvement in operating cash flow, with a net cash flow from operating activities of 250 million, an increase of 200 million year-on-year, primarily due to improved collection [1][2]. - The company is expanding its active magnesium oxide business and gradually ramping up production at its U.S. plant, which is expected to benefit from high tariffs on Chinese products [1]. Summary by Sections Revenue Performance - In the first half of 2024, the company achieved revenue of 2.32 billion from steel refractory materials, 180 million from environmental refractory materials, and 400 million from raw materials, with year-on-year changes of -0.8%, -22.3%, and +79.1% respectively [1]. Profitability Metrics - The overall gross margin for the first half of 2024 was 19.1%, a decrease of 1.2 percentage points year-on-year. The gross margin for Q2 was 18.5%, down 1.8 percentage points, mainly due to rising costs of raw materials and export freight [1]. Cash Flow Analysis - The net cash flow from operating activities for Q2 was 250 million, reflecting a significant improvement due to better collection rates, with a collection ratio up by 20.5 percentage points year-on-year [1][2]. Future Outlook - The company is expected to benefit from the ramp-up of its U.S. plant and the active magnesium oxide business, with ongoing negotiations for trial orders with multiple clients in the cobalt and nickel markets [1].