SUMEC(SH:600710) Guotai Junan Securities·2024-08-19 03:23Investment Rating - The report maintains a rating of "Buy" for the company [5][13]. Core Views - The company has shown a significant improvement in its performance, with a 25% growth in non-recurring net profit in Q2, driven by strong performances in shipbuilding, shipping, ecological protection, and textile sectors [2][3]. - The company is viewed as a low-valuation, high-dividend central enterprise, with a focus on dual-wheel development and dual-cycle driving, indicating optimism for future growth [2][3]. Financial Summary - Revenue for 2022 was 141,148 million, with a projected decline to 122,981 million in 2023, followed by stabilization in 2024 at 122,939 million, and growth in subsequent years [1]. - Net profit attributable to the parent company is expected to grow from 913 million in 2022 to 1,030 million in 2023, reaching 1,308 million by 2026, reflecting a growth rate of 19.0% in 2022 and 12.8% in 2023 [1]. - Earnings per share (EPS) is projected to increase from 0.70 in 2022 to 1.00 in 2026, with a steady growth trajectory [1]. - The return on equity (ROE) is expected to remain stable around 14% to 15% over the forecast period [1]. Business Performance - In H1, the company reported a revenue of 55.93 billion, a decrease of 13.3%, while the net profit attributable to the parent company was 570 million, an increase of 12.1% [3]. - The company’s supply chain revenue accounted for 44% of total revenue, with a significant decline of 18.6% [3]. - The shipbuilding and shipping sectors showed remarkable growth, with a profit increase of 94.6% and a substantial order backlog extending to 2028 [3]. Market Position - The company has a total market capitalization of 10,088 million, with a current share price of 7.72, compared to a target price of 10.42 [5][6]. - The stock has traded within a range of 6.51 to 9.14 over the past year, indicating potential for growth [6].