SNS(SZ:300470) Guotai Junan Securities·2024-08-31 15:09Investment Rating - The report maintains a "Buy" rating for the company [3][4]. Core Views - The company's performance meets expectations, with mechanical seals maintaining a leading position and continuous growth across multiple sectors. Increased R&D investment and acquisitions are driving upstream integration [2][3]. Summary by Relevant Sections Financial Performance - For the first half of 2024, the company achieved revenue of 724 million yuan, an increase of 18.08%, and a net profit attributable to shareholders of 173 million yuan, up 7.64%. The adjusted net profit was 160 million yuan, reflecting a growth of 12.50% [3]. - In Q2 2024, revenue reached 387 million yuan, growing by 18.94%, with a net profit of 91 million yuan, up 12.41% [3]. - The gross margin for H1 2024 was 47.14%, down 4.05 percentage points year-on-year, while the net margin was 23.98%, down 2.33 percentage points year-on-year [3]. Business Segments - Mechanical Seals: Despite a slowdown in new petrochemical projects and increased competition, the company achieved significant growth in incremental business. However, existing business faced slight declines due to reduced user operating rates and budget cuts [3]. - Rubber and Plastic Seals: Revenue from the Yutai Ke segment was 74 million yuan, up 7.81%, with profits increasing by 33.79% [3]. - Special Pumps and Valves: Revenue from rotating jet pumps remained stable, while the subsidiary achieved 56 million yuan in revenue, a 36.65% increase, with profits rising by 117.13% [3]. R&D and Acquisitions - The company invested 33.5 million yuan in R&D in H1 2024, accounting for 4.63% of revenue. This investment has led to improvements in technology and market share [3]. - The acquisition of KS GmbH has received government approval and is progressing steadily, enhancing supply chain stability through upstream integration [3]. Valuation and Price Target - The target price has been adjusted to 41.58 yuan from the previous 55.42 yuan, based on a 22x PE ratio for 2024 [3][4].