LETS(SZ:002398) Tianfeng Securities·2024-08-21 08:03Investment Rating - The report maintains a "Buy" rating for the company with a target price of 4.32 CNY, based on a 14x PE for 2025 [4][6]. Core Insights - The company experienced a decline in revenue and net profit in the first half of 2024, with revenue at 1.18 billion CNY, down 21.06% year-on-year, and net profit at 72.38 million CNY, down 42.02% year-on-year [2][4]. - The new building materials segment, primarily focused on additives, saw a revenue drop of 19.19% to 960 million CNY, attributed to decreased demand in the real estate sector [3][4]. - The company's technical services business reported a revenue of 154 million CNY, down 19.87% year-on-year, but achieved a gross margin increase to 38%, up 3.56 percentage points [3][4]. Financial Performance Summary - The company’s financial forecasts for 2024 to 2026 show a projected net profit of 158.18 million CNY in 2024, 215.22 million CNY in 2025, and 264.73 million CNY in 2026, reflecting a downward revision from previous estimates [4][5]. - The revenue for 2024 is expected to be 2.96 billion CNY, with a slight recovery anticipated in 2025 at 3.32 billion CNY [5][10]. - The company’s EBITDA is projected to decline significantly in 2024 to 285.23 million CNY, with a gradual recovery in subsequent years [5][10]. Market Position and Strategy - The company is positioned as a leading player in the construction materials sector, with a strong market share in various regions, including over 30% in Fujian and Hainan [3][4]. - The company is expanding its production capacity and responding to national strategies like the "Belt and Road" initiative, with plans to enhance its overseas revenue [3][4]. - The focus on new products and markets, particularly in the fields of transportation engineering and electronic testing, is expected to drive future growth [3][4].