COSMOS(SZ:300856) SINOLINK SECURITIES·2024-08-20 02:41Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The company reported a revenue of 693 million RMB for Q2 2024, a decrease of 2.7% quarter-on-quarter but an increase of 15% year-on-year. The decline is attributed to inventory digestion by customers and a seasonal drop in sunscreen shipments [2] - The net profit attributable to the parent company for Q2 2024 was 202 million RMB, down 8.2% quarter-on-quarter but up 6% year-on-year. The decrease is mainly due to reduced government subsidies and increased tax expenses [2] - The company plans to distribute a cash dividend of 0.6 RMB per share, with a payout ratio of 48% [2] Revenue and Profitability Analysis - The gross margin for 2024 is projected at 47.86%, remaining stable quarter-on-quarter but down 1.81% year-on-year, primarily due to high fixed costs during the ramp-up of the Anqing factory [3] - The company’s revenue from cosmetic active ingredients and raw materials for the first half of 2024 was 1.2 billion RMB, a year-on-year increase of 15%, while synthetic fragrance revenue was 193 million RMB, up 41% year-on-year [3] - The company’s overseas revenue for the first half of 2024 was 1.24 billion RMB, a year-on-year increase of 16%, while domestic revenue was 160 million RMB, up 39% [3] Earnings Forecast and Valuation - The growth drivers for 2024 are expected to come from the ramp-up of new sunscreen products, while contributions from personal care products are anticipated to be minimal. The profit forecast for 2024-2026 has been adjusted to 850 million RMB, 1.1 billion RMB, and 1.3 billion RMB respectively, with year-on-year growth rates of 16%, 29%, and 18% [3] - The company is valued at a price-to-earnings ratio of 12, 9, and 8 times for 2024, 2025, and 2026 respectively, maintaining the "Buy" rating [3]