NEWLAND(000997) 西南证券·2024-08-29 01:10Investment Rating - Buy (Maintained) [1] Core Views - The company's cost structure has improved significantly, with a notable increase in gross margin for merchant value-added services [2][3] - Overseas hardware business is expanding steadily, with a focus on localization in key regions such as Latin America, Asia-Pacific, and Europe [3] - The company is increasing investments in merchant SaaS services and overseas localization, which are expected to drive future growth [3] Financial Performance - Revenue for H1 2024 was RMB 3.64 billion, a year-on-year decrease of 5.3% [2] - Net profit attributable to the parent company was RMB 530 million, down 6.2% YoY, but adjusted net profit (excluding equity investment impacts) increased by 21.4% YoY to RMB 650 million [2] - Q2 2024 revenue was RMB 1.9 billion, down 2.2% YoY, while net profit attributable to the parent company increased by 6.0% YoY to RMB 280 million [2] Business Segments - Merchant value-added and operation services revenue decreased by 7.3% YoY to RMB 1.67 billion, but gross margin improved by 4.17 percentage points to 45.3% [3] - Payment product and information recognition product revenue was RMB 1.52 billion, down 0.8% YoY, with strong growth in Latin America (+18% YoY) [3] - The company serves over 3.2 million active merchants, with an ARPU of RMB 167 per user in H1 2024 [3] Cost and Expense Analysis - Overall gross margin for H1 2024 was 43.4%, up 1.62 percentage points YoY [3] - Sales/management/R&D expense ratios increased by 0.37/0.68/1.32 percentage points YoY to 4.8%/6.6%/8.6% respectively [3] Profit Forecast and Valuation - EPS for 2024-2026 is forecasted at RMB 1.13/1.33/1.53, with corresponding P/E ratios of 11/9/8 [3] - Revenue growth is expected to be 2.85%/9.19%/10.84% for 2024-2026 [4] - Net profit growth is projected at 16.68%/16.97%/15.38% for 2024-2026 [4] Overseas Expansion - The company is transitioning from an agency model to a localized direct operation model in Asia-Pacific and Europe [3] - Middle East and Africa region achieved stable revenue of RMB 160 million in H1 2024, with continued bulk supply to key clients [3] Domestic Market - The company strengthened cooperation with major banks, with bank customer revenue increasing by over 37% in H1 2024 [3] - The company successfully entered the top six banks in China [3]