新兴铸管：主动适应行业变化，Q2盈利环比改善

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 3.95 [4][5] Core Views - The company reported a revenue of RMB 18.731 billion for H1 2024, a year-on-year decrease of 23.61%, and a net profit attributable to shareholders of RMB 428 million, down 49.0% year-on-year. However, Q2 2024 net profit showed a quarter-on-quarter increase of 50.2% [1][2] - The company is adapting to industry changes by focusing on differentiated and high-end casting pipe markets, compensating for declines in traditional market sales. The gross margin improved to 6.84% in Q2 2024, up 1.86 percentage points quarter-on-quarter [2][3] - The water conservancy infrastructure investment remains robust, with a 9.9% year-on-year increase in national water conservancy construction investment in H1 2024, reaching RMB 569 billion, which supports the company's market expansion efforts [3] Summary by Sections Financial Performance - For H1 2024, the company achieved a revenue of RMB 18.731 billion, a decrease of 23.61% year-on-year, and a net profit of RMB 428 million, down 49.0% year-on-year. The Q2 2024 net profit was RMB 257 million, reflecting a year-on-year decrease of 48.4% but a quarter-on-quarter increase of 50.2% [1][2] - The company’s earnings per share (EPS) for 2024 is projected to be RMB 0.26, down from previous estimates of RMB 0.45 [1][11] Market Position and Strategy - The company has increased its market share in differentiated products, with a 72% year-on-year increase in sales of these products. The proportion of C-grade pipes has risen to 21%, enhancing retail market share [2] - The company’s casting pipe market share has reached 57%, supported by the ongoing high demand in the water conservancy sector [3] Valuation Metrics - The report estimates a price-to-book (PB) ratio of 0.60 for the company, compared to the average PB of 0.52 for comparable companies in 2024 [1][9]