Shanghai Titan Scientific (SH:688133) Guohai Securities·2024-08-31 10:00Investment Rating - The report assigns a "Buy" rating for Titan Technology (688133) as part of its initial coverage [4][30]. Core Views - Titan Technology is actively promoting the development of its own brand products, with a notable improvement in performance in Q2 2024 compared to previous quarters [4][5]. - The company reported a revenue of 1.396 billion yuan in the first half of 2024, representing a year-on-year growth of 5.13%, but the net profit attributable to shareholders dropped by 89.90% [4][5][9]. - The company is focusing on enhancing its core technologies and expanding its product offerings, with over 6.6 million SKUs available [7][8]. Financial Performance Summary - In H1 2024, Titan Technology achieved a revenue of 1.396 billion yuan, with a net profit of 5 million yuan, down 89.90% year-on-year [4][5][9]. - The gross profit margin for H1 2024 was 19.69%, a decrease of 3.17 percentage points compared to the previous year [4][9]. - The company reported a negative operating cash flow of 75 million yuan in H1 2024, indicating significant capital consumption in operations [6][18]. Product Segment Performance - The revenue breakdown for H1 2024 shows that: - Research reagents generated 578 million yuan with a gross margin of 30.84% - Specialty chemicals generated 460 million yuan with a gross margin of 5.82% - Research instruments and consumables generated 355 million yuan with a gross margin of 19.20% - Laboratory construction and scientific information services generated 4 million yuan with a gross margin of 48.39% [5][9]. Strategic Initiatives - The company is implementing a dual-core strategy focusing on product technology research and infrastructure development to enhance competitiveness [8][30]. - Titan Technology has made significant investments in new facilities and acquisitions to strengthen its market position and operational efficiency [8][30]. Earnings Forecast - The forecast for Titan Technology's revenue from 2024 to 2026 is as follows: - 2024: 2.954 billion yuan - 2025: 3.409 billion yuan - 2026: 4.192 billion yuan - The corresponding net profits are projected to be: - 2024: 19 million yuan - 2025: 63 million yuan - 2026: 144 million yuan [30].