Changzhou Fusion New Material (688503)2024-08-31 14:09Investment Rating - The report maintains a "Recommended" rating for the company, indicating an expectation to outperform the benchmark index by 10%-20% over the next six months [1][16]. Core Views - The company achieved record high quarterly performance in Q2 2024, with revenue of 38.12 billion yuan, a year-on-year increase of 58.98% and a quarter-on-quarter increase of 29.07% [1]. - The increase in revenue is attributed to the rising proportion of N-type silver paste and the increase in silver prices, leading to improved profitability [2]. - The company is actively expanding its silver paste and upstream production capacity to strengthen its market position [2]. - The company is accelerating technological innovation and product upgrades to align with new industry developments [2]. - The non-photovoltaic business is also developing steadily, with new products achieving mass production [2]. Financial Summary - In H1 2024, the company reported revenue of 67.65 billion yuan, a year-on-year increase of 61.79%, and a net profit attributable to shareholders of 2.99 billion yuan, a year-on-year increase of 11.08% [1][3]. - The gross margin for H1 2024 was 10.90%, up 0.73 percentage points year-on-year, while the net profit margin was 4.42%, down 2.02 percentage points year-on-year [1]. - The company’s projected net profits for 2024-2026 are 6.92 billion yuan, 8.19 billion yuan, and 9.41 billion yuan, respectively, with corresponding price-to-earnings ratios of 10, 9, and 8 times [2][3]. - The target price is set at 37.17 yuan, based on a 13x PE for 2024 [2][4].