EBSCN·2024-08-27 09:10Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of the company [5]. Core Views - The company has shown steady growth in performance, with a significant increase in net profit and revenue driven by the railway equipment sector [2][5]. - The demand for maintenance and equipment upgrades is expected to rise, particularly for high-level repairs of train sets, benefiting the company as a leading player in the rail transit equipment market [3][5]. - The company has secured new contracts and continues to innovate with new product developments, enhancing its market position [4][5]. Summary by Sections Financial Performance - In H1 2024, the company achieved operating revenue of 90.04 billion yuan, a year-on-year increase of 3.1%, and a net profit of 4.20 billion yuan, up 21.4% year-on-year [2]. - The overall gross margin was 21.4%, an increase of 0.3 percentage points year-on-year, while the net profit margin rose by 0.9 percentage points to 6.1% [2]. Railway Equipment Business - The railway equipment segment saw a revenue increase of 47.0% in H1 2024, with specific revenue contributions from various categories: locomotives (8.14 billion yuan), passenger cars (2.63 billion yuan), EMUs (26.53 billion yuan), and freight cars (4.68 billion yuan) [2]. - The urban rail and infrastructure business experienced a decline of 14.1% in revenue, primarily due to reduced urban rail engineering income [2]. Maintenance and Upgrades - The company is expected to benefit from the growing demand for maintenance services, particularly as the number of high-level repair contracts for train sets has significantly increased [3]. - The National Railway Administration's push for the promotion of new energy railway equipment is anticipated to lead to a large-scale replacement of old diesel locomotives, further benefiting the company's locomotive business [3]. Orders and Innovations - The company signed new orders totaling 140.1 billion yuan in H1 2024, reflecting a year-on-year growth of 3.24% [4]. - Notable projects include the Indonesian commuter train project and the first train for the Hungary-Serbia high-speed railway [4]. - The company has launched several innovative products, including the world's first commercially operated carbon fiber metro train and a new generation of smart intercity EMUs [4].