中科三环：价格回涨叠加旺季回暖，Q2实现扭亏

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - In H1 2024, the company reported revenues of 3.289 billion yuan, a year-on-year decrease of 23.58%, and a net profit attributable to shareholders of -72 million yuan, down 144.48% year-on-year [1] - Q2 2024 saw revenues of 1.637 billion yuan, a quarter-on-quarter decrease of 0.89% and a year-on-year decrease of 21.62%, with a net profit of 26 million yuan, reversing losses but down 57.07% year-on-year [1] - The company experienced a slight recovery in raw material prices, which, combined with increased production and sales, led to a positive gross margin in Q2 [1] - The company is focusing on cost reduction and efficiency improvements while maintaining high R&D investment, with a capital structure that continues to optimize [1] - The demand for rare earth permanent magnets is expected to improve due to government policies promoting the replacement of old vehicles and appliances, which will benefit the company [1] Summary by Sections Financial Performance - For H1 2024, the company achieved revenues of 3.289 billion yuan, down 23.58% year-on-year, and a net profit of -72 million yuan, down 144.48% year-on-year [1] - Q2 2024 revenues were 1.637 billion yuan, with a gross margin of 10.26%, up 0.64 percentage points from Q1 [1] - The company’s R&D expenses increased by 16.67% to 42 million yuan in Q2 2024 [1] Market Outlook - The demand for rare earth materials is expected to rise due to government incentives for upgrading vehicles and appliances, which are significant consumers of rare earths [1] - Supply constraints are anticipated due to slower growth in domestic quotas and the implementation of new regulations, which may lead to improved pricing for rare earths [1] Profit Forecast and Valuation - Revenue projections for 2024-2026 are 7.693 billion yuan, 9.651 billion yuan, and 11.481 billion yuan, respectively, with net profits of 111 million yuan, 173 million yuan, and 353 million yuan [1] - The expected EPS for the same period is 0.09 yuan, 0.14 yuan, and 0.29 yuan, with corresponding PE ratios of 89.01, 57.15, and 28.00 [1]