King's Luck(SH:603369) Changjiang Securities·2024-09-02 10:09Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - The company reported a robust revenue growth with total operating income of 7.305 billion yuan for H1 2024, representing a year-on-year increase of 22.35%. The net profit attributable to shareholders was 2.461 billion yuan, up 20.08% year-on-year [6][7]. - The second quarter of 2024 saw total operating income of 2.634 billion yuan, a year-on-year increase of 21.52%, with net profit attributable to shareholders at 929 million yuan, reflecting a 16.86% increase year-on-year [6][7]. - The company is experiencing strong growth in specific product categories, particularly in the Special A and Special A+ categories, with growth rates of 25.3% and 21.07% respectively [7]. - The company is also expanding its market presence, particularly in the Jiangsu province and outside the province, with notable growth in regions such as Suzhong and provincial areas [7]. Summary by Sections Financial Performance - For H1 2024, the company achieved total operating income of 73.05 billion yuan, a 22.35% increase year-on-year. The net profit attributable to shareholders was 24.61 billion yuan, up 20.08% year-on-year, and the non-recurring net profit was 24.46 billion yuan, reflecting a 19.23% increase [6][7]. - In Q2 2024, the total operating income was 26.34 billion yuan, a 21.52% increase year-on-year, with net profit at 9.29 billion yuan, a 16.86% increase [6][7]. Product and Regional Growth - The company’s revenue growth is driven by strong performance in the Special A and Special A+ product categories, with respective revenues of 8.1 billion yuan and 16.82 billion yuan in Q2 2024 [7]. - Regional performance highlights include significant growth in Suzhong and provincial areas, with the Suzhong region showing a 32.54% increase in revenue [7]. Profitability and Cost Management - The profit growth rate is slower than revenue growth, primarily due to fluctuations in investment income. The actual gross profit margin improved, while the expense ratio continued to optimize [7]. - In Q2 2024, the net profit margin decreased by 1.41 percentage points to 35.27%, with a slight increase in gross margin and a decrease in sales expense ratio [7]. Future Outlook - The company is expected to continue benefiting from a favorable market environment and potential market expansion, with projected EPS for 2024-2025 at 3.02 and 3.58 yuan, respectively, corresponding to a PE ratio of 13 and 11 times [7].