WEIXING NBM(SZ:002372) Guoxin Securities·2024-08-26 12:40Investment Rating - The investment rating for the company is "Outperform the Market" [4][15]. Core Views - The company has achieved steady revenue growth despite a decline in investment income, with a 4.7% year-on-year increase in revenue to 2.34 billion yuan in H1 2024, while net profit attributable to shareholders decreased by 31.2% to 340 million yuan [5][10]. - The retail business remains robust, with core regions experiencing growth, and international business expanding rapidly, with overseas revenue increasing by 27.4% year-on-year [10][12]. - The company is focusing on high-quality development, enhancing brand, channel, and service capabilities to strengthen its market position, while also emphasizing shareholder returns through a mid-term dividend payout of 1 yuan per share [15][18]. Summary by Sections Financial Performance - In H1 2024, the company reported revenue of 2.34 billion yuan, a 4.7% increase year-on-year, and a net profit of 340 million yuan, down 31.2% year-on-year. The adjusted net profit was 340 million yuan, reflecting a slight decrease of 0.37% [5][10]. - The second quarter revenue was 1.35 billion yuan, up 0.4% year-on-year, while net profit dropped 42.9% to 186 million yuan [5][10]. Product and Regional Performance - Revenue by product in H1 2024 was as follows: PPR 1.07 billion yuan (+3.2%), PE 470 million yuan (-3.1%), PVC 300 million yuan (-12.7%), and other products 460 million yuan (+45.3%) [10][12]. - The company is focusing on core domestic markets, with revenue growth in East China (+5.7%), South China (+5.9%), and Western regions (+3.1%) [10][12]. Margins and Costs - The overall gross margin for H1 2024 was 42.1%, an increase of 0.9 percentage points year-on-year, with Q2 gross margin at 42.6% [12][14]. - The company has increased its marketing expenses to enhance brand influence, leading to a rise in the sales expense ratio by 2.8 percentage points year-on-year [12][14]. Cash Flow and Dividends - Operating cash flow for H1 2024 was 290 million yuan, a decrease of 28.2% year-on-year, with a cash collection ratio of 1.14 [12][14]. - The company plans to distribute a mid-term dividend with a payout ratio of 46% [15][18].