STI(SZ:300416) Southwest Securities·2024-08-23 08:31Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's H1 2024 performance was slightly below expectations due to fluctuations in downstream industry demand, with revenue of 920 million yuan, a year-on-year decrease of 5.6%, and a net profit of 100 million yuan, down 24.4% year-on-year [1] - The integrated circuit verification and analysis business segment saw revenue growth of 18.2% year-on-year, reaching 130 million yuan, contributing 14.0% to total revenue with a gross margin increase of 5.34 percentage points to 42.9% [1] - The company is expected to benefit from capacity expansion in its laboratories and the recovery of downstream demand, leading to improved profitability in the medium to long term [2] Summary by Sections Financial Performance - In Q2 2024, the company achieved revenue of 470 million yuan, a year-on-year decrease of 11.0%, but a quarter-on-quarter increase of 7.2%, with a net profit of 60 million yuan, down 33.8% year-on-year but up 43.6% quarter-on-quarter [1] - The overall gross margin for H1 2024 was 45.0%, an increase of 0.35 percentage points year-on-year, while the net margin was 13.2%, a decrease of 2.91 percentage points year-on-year [1] - The company’s operating costs increased due to rapid capacity expansion, leading to a rise in the expense ratio, which impacted net profit margins [1] Business Segments - The experimental equipment segment faced pressure due to weakened capital expenditure from downstream clients, resulting in a revenue decline of 14.6% year-on-year to 290 million yuan, with a gross margin decrease of 1.31 percentage points to 31.2% [1] - The environmental testing service segment generated revenue of 460 million yuan, a slight decrease of 1.7% year-on-year, with a gross margin decline of 2.23 percentage points to 55.7% [1] - The company’s research and testing institutions segment performed well, achieving revenue of 210 million yuan, up 10.8% year-on-year, with a gross margin increase of 0.73 percentage points to 48.2% [1] Future Outlook - The company is projected to achieve net profits of 350 million yuan, 460 million yuan, and 570 million yuan for 2024, 2025, and 2026 respectively, indicating a compound annual growth rate of 22% over the next three years [2] - The expansion of testing capabilities and the recovery of demand in various sectors, including automotive and aerospace, are expected to drive future growth [2]