Luohe Letone Hydraulics Technology (832225) Southwest Securities·2024-08-29 11:42Investment Rating - The investment rating for the company is "Buy" (maintained) [1]. Core Views - The company reported a decline in revenue and net profit for the first half of 2024, with revenue of 220 million yuan, down 4.7% year-on-year, and a net profit of 46.26 million yuan, down 26.7% year-on-year. The second quarter also showed a similar trend with revenue of 120 million yuan, down 5.0% year-on-year, and a net profit of 27.11 million yuan, down 26.8% year-on-year [1]. - The company is focusing on diversifying its ultra-high pressure equipment business and expects to see growth in the future. It plans to enhance its existing product lines and develop new products, including floating oil hoses and high-pressure cleaning machines [2]. - The forecast for net profit from 2024 to 2026 is approximately 140 million, 160 million, and 180 million yuan, respectively, indicating a compound annual growth rate of 11.4% [2]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 220 million yuan, a decrease of 4.7% year-on-year, and a net profit of 46.26 million yuan, down 26.7% year-on-year. The second quarter's revenue was 120 million yuan, down 5.0% year-on-year, with a net profit of 27.11 million yuan, down 26.8% year-on-year [1]. - The revenue breakdown for various products includes: steel wire winding rubber hoses (34.89 million yuan, -17.84%), steel wire braided rubber hoses (63.12 million yuan, -10.74%), fiber reinforced rubber hoses (11.08 million yuan, +23.97%), and assembly and supporting fittings (102.05 million yuan, +1.33%) [1]. Business Development - The company aims to optimize its existing business by expanding its oil hose product line and developing new markets. It has obtained API 17K certification for some of its oil pipe products, positioning itself to enter the marine engineering hose market [2]. - New projects include the construction of a high molecular material recycling and special rubber research institute in Qingdao, with plans for a prototype of the ultra-high pressure food sterilizer to be ready by September [2]. Profit Forecast - The company forecasts revenue growth from 485.4 million yuan in 2023 to 625.3 million yuan in 2026, with a compound annual growth rate of 9.5% [3]. - The projected net profit for 2024, 2025, and 2026 is 140 million, 160 million, and 180 million yuan, respectively, with a net profit growth rate of 7.56%, 13.22%, and 13.37% [3][5].