Tstc(600552) EBSCN·2024-09-02 08:43Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [5]. Core Views - The company reported a decline in revenue and net profit for the first half of 2024, with revenue at 2.22 billion and a net profit of 40 million, reflecting a year-on-year decrease of 9.6% and 47.6% respectively [1]. - Despite the decline in revenue, the gross margin improved to 15.8%, up by 2.4 percentage points, attributed to the increase in the gross margin of display materials [1]. - The company is expected to see growth in its ultra-thin flexible glass (UTG) segment, with production capacity increasing and new applications being developed [1]. Summary by Sections Financial Performance - For the first half of 2024, the company achieved revenue of 2.22 billion, a net profit of 40 million, and a net profit excluding non-recurring items of -30 million, showing a significant decline compared to the previous year [1]. - The operating cash flow for the first half of 2024 was 30 million, down from 180 million year-on-year [1]. - The second quarter of 2024 saw revenue of 950 million, net profit of 30 million, and a net profit excluding non-recurring items of 1 million, with a year-on-year decline of 19.5%, 43.1%, and 97.9% respectively [1]. Margin Analysis - The overall gross margin for the first half of 2024 was 15.8%, an increase of 2.4 percentage points year-on-year, while the expense ratio rose to 15.3%, up by 4.0 percentage points [1]. - The net profit margin for the first half of 2024 was 2.9%, down by 1.3 percentage points year-on-year [1]. Segment Performance - Revenue from new display materials and application materials decreased by 32.9% and 23.2% respectively in the first half of 2024, with gross margins of 14.4% and 18.8% [1]. - The company’s subsidiary, Shenzhen Guoxian, reported revenue of 1.3 billion and a net profit of 50 million, while another subsidiary, Bengbu Zhongheng, reported revenue of 470 million and a net profit of 50 million [1]. Future Outlook - The company’s UTG project is expected to ramp up production, with four production lines operational and a growing customer base [1]. - The report forecasts a decline in net profit for 2024-2026, with estimates of 170 million, 232 million, and 286 million respectively, reflecting year-on-year decreases of 19%, 21%, and 18% [1][2].