FSL(000541) Guotai Junan Securities·2024-09-01 07:14Investment Rating - The report maintains an "Accumulate" rating for the company [3][16]. Core Views - General lighting growth is under pressure, while the automotive lighting segment continues to progress towards high-end products. The company has seen a slight improvement in gross margins in Q2, and it holds a substantial amount of net cash [1][16]. Summary by Sections 1. Performance Overview - For the first half of 2024, the company achieved revenue of 4.785 billion yuan, a year-on-year increase of 4.78%, and a net profit attributable to shareholders of 192 million yuan, up 13.79% year-on-year. However, Q2 revenue was 2.267 billion yuan, down 4.43% year-on-year, with a net profit of 109 million yuan, an increase of 5.65% year-on-year [11][12]. 2. Revenue Breakdown - Revenue from general lighting products was 1.719 billion yuan, down 4.11% year-on-year, with a gross margin of 26.23%, up 2.96 percentage points. LED packaging and components generated 1.323 billion yuan, up 5.58% year-on-year, with a gross margin of 16.90%, down 2.05 percentage points. Automotive lighting products reached 1.045 billion yuan, up 29.64% year-on-year, with a gross margin of 18.39%, up 1.31 percentage points. Trade and other products accounted for 697 million yuan, down 2.35% year-on-year, with a gross margin of 8.05%, up 2.43 percentage points [12][14]. 3. Profitability Analysis - The company's gross margin for the first half of 2024 was 19.29%, up 1.05 percentage points, and the net margin was 5.3%, up 0.37 percentage points. The Q2 gross margin was 20.38%, up 1.33 percentage points, with a net margin of 6.1%, up 0.46 percentage points. The improvement in gross margins is attributed to cost reduction and efficiency improvements, particularly in the general lighting and automotive lighting segments [14][15]. 4. Cash Flow and Financial Health - As of the end of the first half of 2024, the company had 3.299 billion yuan in cash and trading financial assets, a year-on-year increase of 26.86%. The net cash position was 2.9 billion yuan, an increase of 984 million yuan year-on-year. The net cash flow from operating activities for Q2 was 307 million yuan, down 1.88% year-on-year [15]. 5. Investment Recommendations - The report forecasts EPS for 2024-2026 to be 0.22, 0.25, and 0.29 yuan, respectively, with year-on-year growth of 16%, 16%, and 15%. The target price has been adjusted to 5.50 yuan, reflecting a 25x PE ratio based on industry comparisons [16].