ShaanGu(601369) Guotou Securities·2024-08-28 13:31Investment Rating - The investment rating for the company is "Buy - A" with a target price of 8.45 CNY, maintaining the rating [4][7]. Core Views - The company reported a slight decline in revenue for H1 2024, with total revenue of 5.004 billion CNY, down 3.51% year-on-year, and a net profit of 458 million CNY, down 13.33% year-on-year. The second quarter showed a smaller revenue decline of 0.45% compared to the previous year [2]. - The company is experiencing pressure in the metallurgy sector due to weak downstream demand, but it is making progress in expanding into new markets such as petrochemicals and energy, which is stabilizing revenue [2][3]. - The gas segment has shown stable growth, with revenue of 1.867 billion CNY in H1 2024, up 17.43% year-on-year, contributing to 37.31% of total revenue [3]. - The company maintains a high dividend level, with a proposed cash dividend of 0.18 CNY per share, reflecting a distribution ratio of approximately 67% [6]. Summary by Sections Financial Performance - In H1 2024, the company achieved a revenue of 5.004 billion CNY, a decrease of 3.51% year-on-year, and a net profit of 458 million CNY, down 13.33% year-on-year. The Q2 revenue was 2.512 billion CNY, a decrease of 0.45% year-on-year, with a net profit of 224 million CNY, down 16.04% year-on-year [2]. - The sales gross margin was approximately 23.38%, a decrease of 0.57 percentage points year-on-year, while the net profit margin was about 9.16%, down 1.04 percentage points year-on-year [2]. Business Segments - The equipment segment generated revenue of 2.650 billion CNY in H1 2024, down 12.31% year-on-year, accounting for 52.95% of total revenue [2]. - The gas segment's revenue reached 1.867 billion CNY, up 17.43% year-on-year, contributing 37.31% to total revenue [3]. - The industrial services segment reported revenue of 487 million CNY, down 15.20% year-on-year, accounting for 9.74% of total revenue [3]. Market Outlook - The company is focusing on expanding its market share in the petrochemical and energy sectors, achieving significant breakthroughs in various projects, including the largest nitric acid unit in China [2][3]. - The company is expected to maintain stable profit growth due to its competitive position in the equipment sector and the steady growth of its gas business [6][7].