Wujin Stainless(SH:603878) Minsheng Securities·2024-08-28 07:41Investment Rating - The report maintains a "Recommended" rating for the company [4][6]. Core Views - The company experienced a decline in revenue and net profit in H1 2024, with revenue of 1.532 billion yuan, down 16.2% year-on-year, and a net profit of 140 million yuan, down 24% year-on-year [2][3]. - Despite the drop in sales volume, the gross margin improved, with a gross margin of 16.60% in H1 2024, an increase of 0.71 percentage points year-on-year [3]. - The company is focusing on high-end product expansion and quality improvement, supported by new equipment acquisitions and certifications [4]. Financial Performance - In H1 2024, the company sold 23,000 tons of seamless pipes, a decrease of 12.62% year-on-year, while welded pipe sales were 16,300 tons, down 2.11% year-on-year [3]. - The average price for seamless pipes was 48,507 yuan/ton, up 6.17% year-on-year, while welded pipes were priced at 22,593 yuan/ton, down 19.47% year-on-year [3]. - The company forecasts net profits of 335 million yuan, 386 million yuan, and 417 million yuan for 2024, 2025, and 2026 respectively, with corresponding PE ratios of 9x, 8x, and 7x [4][5]. Future Outlook - The company is expanding its high-end production capacity, with a project to produce 20,000 tons of high-performance seamless pipes expected to enhance profitability [4]. - The company has made significant investments in new production lines and has achieved various quality certifications, positioning itself for future growth [4].