CATEC(SH:600879) HTSC·2024-09-01 06:03Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 11.88 [1] Core Views - The company has experienced a decline in net profit by 35.77% year-on-year for H1 2024, with revenue of RMB 77.12 billion, down 20.00% year-on-year [1] - The aerospace military product delivery has decreased due to changes in procurement schedules from downstream customers, leading to a revenue of RMB 57.46 billion with a gross margin of 22.13% [1] - The company is focusing on optimizing its business structure by divesting non-core assets and enhancing its core business capabilities [3] Financial Performance Summary - For H1 2024, the company reported a net profit of RMB 2.49 billion, a decrease of 35.77% year-on-year, and a non-recurring net profit of RMB 1.86 billion, down 49.93% year-on-year [1] - The second quarter revenue was RMB 38.98 billion, a year-on-year decrease of 24.73% but a quarter-on-quarter increase of 2.20% [1] - The company expects EPS for 2024-2026 to be RMB 0.22, 0.28, and 0.33 respectively, with a PE ratio of 54 times for 2024 [1] Business Development Summary - The company continues to expand its market presence in aerospace major model support, successfully contributing to manned lunar landing projects [2] - The unmanned systems sector is also growing, with successful deliveries of new products like the FH-96V carrier-based drone [2] - The company has completed the transfer of 51% equity in Aerospace Electric Company, focusing on core business adjustments and enhancing profitability [3]