WEIGUANG(SZ:002801) Southwest Securities·2024-08-23 10:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 22.05 CNY over the next six months [1][6]. Core Views - The company reported a revenue of 680 million CNY for the first half of 2024, reflecting a year-on-year increase of 4.8%. However, the net profit attributable to the parent company decreased by 4.0% to 150 million CNY [1]. - The company has successfully expanded its domestic sales, achieving a 11.0% year-on-year growth in domestic revenue, which now accounts for 47.6% of total revenue [1][2]. - The overall gross margin for the first half of 2024 was 32.7%, a slight decrease of 0.44 percentage points year-on-year, primarily due to a decline in the proportion of higher-margin overseas business [2]. - The company is actively developing new business areas, including energy storage and robotics, with significant growth expected in the servo motor segment, which is projected to grow at a compound annual growth rate of 57% over the next three years [2][5][6]. Summary by Sections Financial Performance - In Q2 2024, the company achieved a revenue of 370 million CNY, up 5.0% year-on-year and 16.2% quarter-on-quarter, with a net profit of 80 million CNY, down 4.1% year-on-year but up 12.7% quarter-on-quarter [1]. - The company’s gross margin improved to 33.2% in Q2 2024, up 1.09 percentage points year-on-year and 1.11 percentage points quarter-on-quarter [2]. Business Segments - The company has made significant progress in the development of new products, including energy-efficient motors and fans, with the external rotor fan segment generating 330 million CNY in revenue, a 12.3% increase year-on-year [2][5]. - The servo motor business saw a remarkable revenue increase of 52.6% year-on-year, reaching 60 million CNY [2]. Future Outlook - The company is expected to achieve net profits of 340 million CNY, 400 million CNY, and 470 million CNY for the years 2024, 2025, and 2026, respectively, with corresponding PE ratios of 11, 10, and 8 [3][6]. - The report anticipates a compound annual growth rate of 57% in net profit over the next three years, supported by the expansion of high-margin product lines and market share growth in emerging sectors [6].