CHINA TUNGSTEN HIGHT(SZ:000657) Southwest Securities·2024-08-23 03:38Investment Rating - The investment rating for the company is "Buy" (maintained) with a current price of 8.00 CNY [1]. Core Views - The company reported a revenue of 6.807 billion CNY for H1 2024, representing a year-on-year growth of 3.98%. However, the net profit attributable to shareholders decreased by 39.30% to 147 million CNY [1]. - In Q2 2024, the company achieved a revenue of 3.840 billion CNY, showing a year-on-year increase of 10.06% and a quarter-on-quarter increase of 29.44%. The net profit for Q2 was 83 million CNY, down 41.62% year-on-year but up 30.16% quarter-on-quarter [1]. - The overall demand in the downstream market is under pressure, yet the company managed to achieve stable revenue growth, with sales of CNC blades increasing by over 20% [2]. - The company is undergoing a gradual injection of mining assets, which is expected to enhance operational stability and reduce earnings volatility [2]. - The forecast for net profit attributable to shareholders for 2024-2026 is 520 million CNY, 630 million CNY, and 740 million CNY respectively, with a compound annual growth rate of 15% [2]. Summary by Sections Financial Performance - H1 2024 revenue reached 6.807 billion CNY, a 3.98% increase year-on-year. The net profit was 147 million CNY, down 39.30% [1]. - Q2 2024 revenue was 3.840 billion CNY, a 10.06% year-on-year increase and a 29.44% quarter-on-quarter increase. The net profit was 83 million CNY, down 41.62% year-on-year but up 30.16% quarter-on-quarter [1]. Business Segments - The cutting tools and tools segment generated 1.572 billion CNY in revenue, up 9.44% year-on-year, with CNC blade sales exceeding 60 million pieces, a growth of over 20% [2]. - The refractory metals segment saw revenue of 1.221 billion CNY, up 16.53% year-on-year, while other hard alloys generated 1.695 billion CNY, down 5.75% [2]. - Powder products achieved revenue of 1.551 billion CNY, a 20.79% increase year-on-year, while trade and equipment revenue fell to 768 million CNY, down 21.61% [2]. Profitability Metrics - The gross margin for H1 2024 was 14.91%, a decrease of 1.34 percentage points year-on-year. The net margin was 2.66%, down 1.62 percentage points year-on-year [2]. - The company’s operating expenses ratio for H1 2024 was 11.66%, an increase of 0.61 percentage points year-on-year [2]. Future Outlook - The company is expected to see net profits of 520 million CNY, 630 million CNY, and 740 million CNY for 2024, 2025, and 2026 respectively, indicating a compound annual growth rate of 15% [2].