CNGR(SZ:300919) Soochow Securities·2024-08-29 00:31Investment Rating - The investment rating for Zhongwei Co., Ltd. is "Buy" (maintained) [1] Core Views - The company's performance in H1 2024 met expectations, with revenue of 20.1 billion yuan, a year-on-year increase of 16.3%, and a net profit attributable to shareholders of 860 million yuan, up 12.5% year-on-year [3] - In Q2 2024, the company maintained stable profits from precursor materials, with nickel smelting contributing to profit growth [3] - The company is expected to benefit from rising nickel prices and increased production capacity from its projects in Indonesia [3] Summary by Sections Financial Performance - H1 2024 revenue was 20.1 billion yuan, with a net profit of 860 million yuan, aligning with the company's prior guidance [3] - Q2 2024 revenue reached 10.8 billion yuan, with a net profit of 480 million yuan, showing a quarter-on-quarter increase of 15.3% and 13.5% respectively [3] - The gross margin for Q2 was 12.1%, reflecting a slight increase [3] Production and Sales - In H1 2024, the production of ternary precursors was 114,000 tons, with a significant increase in iron phosphate shipments [3] - Nickel production in H1 2024 exceeded 35,000 tons, with Q2 shipments of over 20,000 tons, marking a nearly 40% increase quarter-on-quarter [3] Cost Management and Cash Flow - The company maintained a good control over expense ratios, with a total expense ratio of 6.9% in H1 2024 [4] - Operating cash flow for H1 2024 was 1.3 billion yuan, a 42% increase year-on-year, although Q2 saw a decline [4] Profit Forecast and Valuation - The profit forecast for 2024-2026 has been adjusted, with expected net profits of 2.01 billion, 2.45 billion, and 3.02 billion yuan respectively [4] - The target price for 2024 is set at 39 yuan, based on an 18x PE ratio [4]