FIRMACO(SH:600967) Minsheng Securities·2024-08-22 00:30Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook based on its unique position in the market and strategic initiatives [1][3]. Core Insights - The company reported a revenue of 4.788 billion yuan for 1H24, a year-over-year decline of 21.6%, with a net profit attributable to shareholders of 264 million yuan, down 39.3% year-over-year [1]. - The decline in performance is attributed to delays in the execution of important contracts, but a recovery in performance is expected in the second half of 2024 [1]. - The company is focusing on increasing its research and development efforts in strategic emerging industries, with R&D expenses rising by 21.9% year-over-year to 107 million yuan in 2Q24 [1]. Summary by Sections Financial Performance - 1H24 revenue was 4.788 billion yuan, down 21.6% year-over-year; net profit was 264 million yuan, down 39.3% year-over-year; and net profit excluding non-recurring items was 262 million yuan, down 39.1% year-over-year [1]. - In 2Q24, revenue was 2.504 billion yuan, a decrease of 28.7% year-over-year but an increase of 9.6% quarter-over-quarter [1]. - The gross margin for 2Q24 decreased by 2.5 percentage points to 7.3%, while the net margin decreased by 2.4 percentage points to 3.9% [1]. Revenue Structure - Domestic revenue for 1H24 was 4.508 billion yuan, down 21.8% year-over-year, while international revenue was 279 million yuan, down 18.2% year-over-year [1]. - The company achieved a completion rate of 40% of its 2024 revenue target of 10 billion yuan in 1H24, with expectations for improvement in the second half [1]. Research and Development - R&D expenses for 1H24 increased by 8.7% to 150 million yuan, with the R&D expense ratio rising by 0.9 percentage points to 3.1% [1]. - The company is enhancing its strategic focus on emerging industries, which is expected to drive future growth [1]. Cash Flow and Financial Health - The net cash flow from operating activities for 1H24 was -1.540 billion yuan, an improvement from -1.918 billion yuan in 1H23 [1]. - As of the end of 2Q24, accounts receivable decreased by 13.0% to 1.705 billion yuan, while inventory increased by 0.4% to 2.908 billion yuan [1].