DHPI(SH:603856) Tianfeng Securities·2024-08-21 08:30Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the stock over the next six months [3][5][13]. Core Views - The company has shown steady revenue growth, with a reported revenue of 1.578 billion in the first half of 2024, a year-on-year increase of 2.13%. The net profit attributable to the parent company reached 150 million, reflecting a growth of 5.02% [1]. - The company is the largest manufacturer of composite pipes globally and is expanding into new sectors such as hydrogen energy, nuclear power, chemicals, and marine photovoltaics, which is expected to enhance its market share in the pipeline industry [1]. - The high demand for water conservancy investments and government support for underground pipeline renovations are anticipated to benefit the company significantly [3]. Financial Performance Summary - In the first half of 2024, the company achieved a gross margin of 19.53%, with a slight decrease of 1.29 percentage points year-on-year. The operating cash flow improved slightly, with a net cash flow from operations of 18 million, an increase of 7 million year-on-year [3][8]. - The sales revenue from various products showed mixed results, with PE and anti-corrosion pipe sales increasing by 14.3% and 16.5% respectively, while sales of insulation and PVC pipes saw significant declines of 68.2% and 71.3% [2]. - The company’s financial forecasts indicate a projected net profit of 230 million, 270 million, and 312 million for the years 2024, 2025, and 2026 respectively, reflecting a robust growth trajectory [4][7]. Market and Industry Outlook - Water conservancy investment has maintained a high level of activity, with a year-on-year increase of 28.9% from January to July 2024, and a notable 38.6% increase in July alone. This trend is expected to accelerate the physical workload in water conservancy construction [3]. - The company is actively promoting the layout of hydrogen pipelines, which is expected to have a broad development prospect as the hydrogen energy industry grows [3].