Shanghai Friendess(SH:688188) Guotou Securities·2024-08-20 23:30Investment Rating - The investment rating for the company is "Buy-A" with a target price of 188.40 CNY over the next six months [5][11]. Core Views - The company has demonstrated strong revenue growth driven by high demand in export markets and the continuous expansion of high-power products. In H1 2024, the company achieved a revenue of 884 million CNY, a year-on-year increase of 33.65%, and a net profit of 491 million CNY, up 35.67% year-on-year [3][4]. - The company is expected to benefit from the growth in its welding business, which is anticipated to open new growth avenues [4][9]. Revenue Breakdown - The revenue from the "Follow-up + Board Card" segment was 299 million CNY in H1 2024, accounting for 34% of total revenue, with a year-on-year growth of 11.32% [4]. - The "Bus" segment, primarily high-power products, generated 212 million CNY, representing 24% of total revenue, with a significant year-on-year increase of 44.43% [4]. - The "Cutting Head" segment, compatible with both high-power and mid-low power systems, achieved 252 million CNY in revenue, accounting for 29% of total revenue, and a remarkable year-on-year growth of 64.44% [4]. - Other businesses, mainly welding, precision, and MES, contributed 121 million CNY, making up 14% of total revenue, with a year-on-year increase of 30.52% [4]. Profitability and Financial Metrics - The company's gross margin improved to 81.28% in H1 2024, up 0.92 percentage points year-on-year, while the net margin reached 59.82%, an increase of 1.72 percentage points [8]. - The gross margin for the "Follow-up + Board Card" segment was 86.19%, while the "Bus" segment achieved a gross margin of 90.66% [8]. - The company plans to distribute a cash dividend of 7.18 CNY per 10 shares, totaling 148 million CNY, which represents 30.03% of the net profit for H1 2024 [9]. Future Projections - Revenue projections for 2024 to 2026 are 1.89 billion CNY, 2.48 billion CNY, and 3.31 billion CNY, with growth rates of 34.34%, 31.00%, and 31.81% respectively [11]. - Net profit forecasts for the same period are 967 million CNY, 1.27 billion CNY, and 1.72 billion CNY, with growth rates of 32.67%, 31.73%, and 35.06% respectively [11].