OTIC(SZ:000962) Minsheng Securities·2024-08-27 08:34Investment Rating - The report maintains a "Recommended" rating for the company, with a current price of 10.05 CNY [4]. Core Views - The company's revenue for H1 2024 reached 593 million CNY, a year-on-year increase of 8.41%, while the net profit attributable to shareholders decreased by 5.04% to 112 million CNY. The adjusted net profit increased by 8.74% to 102 million CNY [2]. - The main business of tantalum and niobium has a full order book and capacity release is expected to be a future highlight, despite a slight downturn in tantalum wire and powder sales due to weak demand in consumer electronics [2]. - The company is expected to benefit from a gradual recovery in consumer electronics demand in H2 2024, which may stimulate the recovery of tantalum powder and wire business [2]. - The gross margin improved to 19.42% in H1 2024, up 2.22 percentage points year-on-year, supported by low ore costs and product mix improvements [2]. - Investment income was below expectations, with a significant decline in revenue from Xicai Institute, attributed to a slowdown in military demand [2]. - The company has new project investment plans, including a tantalum and niobium metallurgy casting product production line and an intelligent production line for niobium superconducting cavities, which are expected to enhance capacity [2]. Financial Summary - For 2024E, the company is projected to achieve total revenue of 1,369 million CNY, a growth rate of 23.5%, and a net profit attributable to shareholders of 241 million CNY, reflecting a growth rate of 28.8% [3][5]. - The earnings per share (EPS) is expected to be 0.48 CNY in 2024, with a price-to-earnings (PE) ratio of 21 [3][5]. - The company’s gross margin is forecasted to improve to 19.63% in 2024, with a net profit margin of 17.6% [5].