Hubei Feilihua Quartz Glass (SZ:300395) Minsheng Securities·2024-08-23 08:00Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook based on its strong product barriers and growth potential [1][3]. Core Views - The company experienced a decline in revenue and net profit in the first half of 2024, with revenue at 915 million yuan, down 10.5% year-over-year, and net profit at 172 million yuan, down 39.9% year-over-year. However, there was a quarter-over-quarter improvement in both revenue and profit in Q2 2024 [1]. - The company is recognized as a leader in high-end quartz materials in China, with significant certifications from major semiconductor manufacturers, which supports its long-term growth prospects [1]. - The report highlights an increase in research and development investment, with R&D expenses rising by 37.8% to 131 million yuan in the first half of 2024, reflecting the company's commitment to innovation [1]. Financial Performance Summary - In Q2 2024, the company achieved revenue of 505 million yuan, a 23.0% increase quarter-over-quarter, despite a 3.6% year-over-year decline. Net profit for the same period was 95 million yuan, showing a 22.5% increase quarter-over-quarter [1]. - The gross margin for the first half of 2024 decreased by 7.3 percentage points to 42.9%, while the net margin fell by 9.6 percentage points to 19.9%, primarily due to a significant drop in the gross margin of high-margin quartz glass products [1]. - The company’s revenue from quartz glass products grew by 22.71% year-over-year to 380 million yuan, while revenue from quartz glass materials decreased by 21.37% year-over-year to 530 million yuan [1]. Future Earnings Forecast - The company’s projected net profits for 2024, 2025, and 2026 are 475 million yuan, 597 million yuan, and 824 million yuan, respectively, with corresponding price-to-earnings ratios of 32x, 25x, and 18x [2][4].