Neway CNC(SH:688697) Southwest Securities·2024-08-29 08:03Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [1][2]. Core Views - The company's H1 2024 performance met expectations, with revenue of 1.162 billion yuan, a year-on-year increase of 4.93%, and a net profit of 145 million yuan, a year-on-year decrease of 4.86% [1]. - The machine tool industry is facing demand pressure, but the company managed to achieve slight revenue growth by expanding its market [1]. - The gross profit margin decreased due to intensified market competition, with H1 2024 gross margin at 25.31%, down 0.75 percentage points year-on-year [1]. Summary by Sections Financial Performance - In Q2 2024, the company achieved revenue of 614 million yuan, a year-on-year increase of 5.81% and a quarter-on-quarter increase of 11.89% [1]. - The net profit for Q2 2024 was 75 million yuan, a year-on-year decrease of 6.50% but a quarter-on-quarter increase of 8.10% [1]. - The company’s revenue from large machining centers was 530 million yuan, vertical CNC machines 360 million yuan, and horizontal CNC machines 250 million yuan in H1 2024 [1]. Market Dynamics - The machine tool industry saw a 3% decline in revenue for key enterprises in the first half of 2024, with total profit down 9.2% [1]. - New orders for metal cutting machine tools increased by 4.1%, while the backlog of orders decreased by 5.4% [1]. - Domestic sales accounted for 1.01 billion yuan of revenue, while international sales contributed 150 million yuan in H1 2024 [1]. Profitability Metrics - The gross profit margin for H1 2024 was 25.31%, with a decline in the margin for vertical CNC machines being particularly notable [1]. - The net profit margin for H1 2024 was 12.45%, down 1.28 percentage points year-on-year [1]. - The company’s R&D expense ratio increased by 0.36 percentage points, contributing to the slight decline in net profit [1]. Future Projections - The company is projected to achieve net profits of 360 million yuan, 420 million yuan, and 480 million yuan for 2024, 2025, and 2026 respectively, with a compound annual growth rate of 15% [2][3].