LSGC(SH:600738) Yuan Da Xin Xi·2024-09-01 01:38Investment Rating - The investment rating for the company is "Positive" [8] Core Views - The company's main business is recovering, with the state-owned controlling shareholder planning to fully subscribe to the private placement, demonstrating confidence in the company's future [2][7] - The textile and apparel professional market is experiencing a continuous recovery, and the company's business is achieving growth [6][15] - The company is focusing on traditional business development, leading to a sustained improvement in profitability [11][12] Summary by Sections 1. Focus on Traditional Business Development and Continuous Profitability Recovery - In H1 2024, the company achieved operating revenue of 356 million, a year-on-year decrease of 24.64%, while net profit attributable to shareholders was 73 million, a year-on-year increase of 61.79% [3][11] - The company is concentrating on its core business and reducing new retail operations, which impacted Q2 performance [11] 2. Deepening Professional Market Management and Commercial Retail Business - The professional market management business, which includes the Hangzhou and Nanjing wholesale markets, is the core business, accounting for over 60% of total revenue [15] - In H1 2024, the professional market management business generated revenue of 221 million, a year-on-year increase of 2.31%, with a gross margin of 78.55% [6][15] 3. State-Owned Controlling Shareholder Plans Full Subscription to Private Placement - The state-owned controlling shareholder, Yuanming Holdings, plans to raise 530 million for core business development, digital transformation, and hotel investment projects [17] 4. Comparable Company Valuation - The company's current valuation is at a reasonable level compared to peers, with a market cap of 2.695 billion and a projected PE ratio of 20.26 for 2024 [18]