First(SH:603806) Soochow Securities·2024-08-26 12:33Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company achieved a revenue of 10.76 billion yuan in H1 2024, a year-on-year increase of 1.4%, with a net profit attributable to shareholders of 930 million yuan, up 4.9% year-on-year. The gross margin was 16.7%, an increase of 2.1 percentage points, and the net profit margin was 8.6%, up 0.3 percentage points [3] - In Q2 2024, the company experienced a decline in revenue of 4.6% quarter-on-quarter but a slight increase of 2.3% year-on-year. The net profit for Q2 was 410 million yuan, down 21.8% quarter-on-quarter and 22% year-on-year. The gross margin improved to 18.1%, with a net profit margin of 7.5% [3] - The company continues to increase its market share, with H1 2024 shipments reaching approximately 1.39 billion square meters, a year-on-year increase of 43.6%. The company expects shipments for 2024 to reach 2.6 to 2.8 billion square meters, a year-on-year increase of 20-30% [3] - The new materials segment showed strong performance, with photoresist dry film shipments in H1 2024 increasing by 36% year-on-year. The company anticipates that shipments will exceed 150 million square meters in 2024, a 50% increase year-on-year [3] - Operating cash flow significantly improved, with net cash inflow from operating activities in Q2 2024 reaching 940 million yuan, a quarter-on-quarter increase of 204% [3] Financial Forecast and Valuation - The company’s revenue forecast for 2024-2026 is adjusted to 18.4 billion yuan, 23.6 billion yuan, and 30.1 billion yuan respectively, with a target price of 18 yuan based on a 20x P/E ratio for 2025 [4] - The earnings per share (EPS) for 2024 is projected to be 0.71 yuan, with a P/E ratio of 19.78 [2][4] - The company’s total revenue for 2024 is expected to be 22.546 billion yuan, with a net profit of 1.842 billion yuan [10]