兴业科技：宏兴净利率快速增长

Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [5][4] Core Views - The company reported a revenue of 665 million in Q2 2024, a decrease of 9.2% year-on-year, and a net profit of 23 million, down 65.1% year-on-year. For the first half of 2024, the revenue was 1.261 billion, an increase of 5.5%, while the net profit was 57 million, down 38.4% year-on-year [1] - The company's leather revenue for shoe and bag straps was 852 million, a slight decrease of 0.3%, accounting for 68% of total revenue. The decline was attributed to slow recovery in domestic market consumption and weak demand from downstream customers during the off-season. Conversely, automotive interior leather revenue was 294 million, up 21.1%, benefiting from the rapid development of the domestic new energy vehicle market [1][2] - The company has strong production capacity across multiple facilities, allowing for effective resource integration and cost control, which is expected to gradually release scale effects [3] Financial Performance Summary - For the first half of 2024, the company's gross margin was 20.4%, an increase of 0.1 percentage points year-on-year. The net profit margin was 4.5%, down 3.2 percentage points year-on-year. The automotive interior leather segment showed a gross margin of 31.4%, up 4.1 percentage points year-on-year [1] - The company adjusted its earnings forecast, expecting EPS for 2024-2026 to be 0.6, 0.7, and 0.9 yuan per share, respectively, with corresponding PE ratios of 15, 12, and 10 times [4][7]