LHG(SH:600186) Huaxin Securities·2024-09-01 06:11Investment Rating - The report maintains a "Buy" investment rating for Lianhua Holdings [1][3]. Core Views - The company has successfully expanded its main business and launched an incentive plan that reflects confidence in its growth prospects [1]. - Lianhua Holdings reported a 25% year-on-year increase in revenue for H1 2024, reaching 1.222 billion yuan, driven by growth in its core business and contributions from its computing power segment [1][2]. - The company’s net profit attributable to shareholders for H1 2024 was 101 million yuan, also a 101% increase year-on-year [1]. Summary by Sections Financial Performance - In Q2 2024, Lianhua Holdings achieved revenue of 645 million yuan, a 25% increase year-on-year, with a net profit of 52 million yuan, up 77% year-on-year [1]. - The gross margin for Q2 2024 increased by 5 percentage points to 22.25%, attributed to cost reduction and efficiency improvements [1]. - The company’s market share in the MSG segment continues to rise, with Q2 2024 MSG revenue at 486 million yuan, a 27% increase year-on-year [1]. Business Development - The computing power business has shown promising growth, with Q2 2024 revenue of 14 million yuan, a 54% increase from the previous quarter [1]. - The company is actively expanding its distribution channels, with a total of 2,743 distributors by the end of H1 2024, an increase of 7 from the beginning of the year [1]. - The incentive plan includes stock options and restricted stock grants to 23 individuals, reflecting confidence in the computing power business's development [2]. Profit Forecast - The company is expected to continue its internal reforms and maintain steady growth in its main business, with projected EPS of 0.13, 0.17, and 0.23 yuan for 2024, 2025, and 2026 respectively [3]. - The projected revenue growth rates for 2024, 2025, and 2026 are 30%, 26.1%, and 22.8% respectively, with net profit growth rates of 80.5%, 31.8%, and 31.2% [5][6].