兴业科技：存货减值致利润承压，汽车皮革盈利能力进一步提升

Investment Rating - The investment rating for the company is "Buy" (maintained) with a market price of 7.96 CNY [1]. Core Views - The company reported a revenue of 1.261 billion CNY in the first half of 2024, a year-on-year increase of 5.45%, but the net profit attributable to shareholders decreased by 38.44% to 57 million CNY [1]. - The decline in profit was primarily due to an increase in asset impairment losses, particularly inventory impairment losses, which rose by 23.3 million CNY to 57.33 million CNY [1]. - The company is expected to continue to grow in the automotive leather segment, with a projected increase in net profit attributable to shareholders from 226 million CNY in 2024 to 343 million CNY in 2026 [1]. Summary by Relevant Sections Financial Performance - Revenue (in million CNY): 1,988 (2022A), 2,700 (2023A), 3,032 (2024E), 3,554 (2025E), 4,104 (2026E) with growth rates of 15%, 36%, 12%, 17%, and 15% respectively [1]. - Net Profit (in million CNY): 151 (2022A), 186 (2023A), 226 (2024E), 289 (2025E), 343 (2026E) with growth rates of -17%, 24%, 21%, 28%, and 19% respectively [1]. - Earnings per Share (in CNY): 0.52 (2022A), 0.64 (2023A), 0.77 (2024E), 0.99 (2025E), 1.18 (2026E) [1]. Business Segments - Revenue breakdown for H1 2024: - Leather for shoes and bags: 852 million CNY, down 0.30% year-on-year, accounting for 67.58% of total revenue. - Automotive interior leather: 294 million CNY, up 21.11% year-on-year, accounting for 23.33% of total revenue. - Second-layer leather collagen raw materials: 70.96 million CNY, up 17.94% year-on-year, accounting for 5.63% of total revenue [1]. - The subsidiary, Baotai Leather, achieved a revenue of 311 million CNY in H1 2024, up 57.5% year-on-year [1]. Profitability and Cash Flow - The company's gross margin increased by 0.1 percentage points to 20.36% in H1 2024, while the net profit margin decreased by 2.52 percentage points to 6.37% [1]. - Operating cash flow reached 180 million CNY in H1 2024, a year-on-year increase of 384.56% [1]. - The cash flow from operating activities to net income ratio was 233.67% [1].