Grace(SH:603256) Tianfeng Securities·2024-08-31 10:30Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the stock's performance in the next six months [4][6]. Core Views - The company achieved a net profit of 0.01 billion yuan in the first half of 2024, marking a turnaround from losses in the previous year, with total revenue reaching 4.08 billion yuan, a year-on-year increase of 41.45% [1][4]. - The demand for electronic fabrics is on the rise, with a 35% increase in revenue to 3.7 billion yuan in the first half of 2024, driven by growing terminal market demand [2][4]. - The company is expected to gradually achieve domestic substitution in high-end electronic fabric manufacturing, with projected net profits of 0.3 billion yuan, 0.8 billion yuan, and 1.2 billion yuan for 2024, 2025, and 2026 respectively [4][6]. Financial Performance Summary - The company reported a gross margin of 15.14% in the first half of 2024, an increase of 5.62 percentage points year-on-year, with a quarterly gross margin of 17.73% in Q2 2024 [3]. - The operating cash flow for the first half of 2024 was 0.27 billion yuan, an increase of 0.72 billion yuan year-on-year, indicating improved cash generation capabilities [3][11]. - The company’s total revenue is projected to grow from 661.15 million yuan in 2023 to 808.03 million yuan in 2024, reflecting a growth rate of 22.21% [5][12]. Market Trends and Outlook - The electronic fabric industry has begun to see price increases since April 2024, with expectations for further price improvements in the second half of the year, enhancing profit potential [2][4]. - The recovery in downstream consumer electronics demand, particularly in smartphones and tablets, is expected to continue, supporting the company's growth trajectory [2][4].