HONGLU(SZ:002541) Great Wall Securities·2024-09-02 10:10Investment Rating - The report maintains a rating of "Accumulate" for the company [1] Core Views - The company experienced pressure on its performance in the first half of 2024, with revenue declining by 6.73% year-on-year to 10.326 billion yuan and net profit decreasing by 22.58% to 428 million yuan [1] - Increased R&D investment, which rose by 62.50% to 331 million yuan, impacted the company's earnings, while steel structure production showed a slight increase of 0.12% year-on-year [1][2] - The company is focusing on smart manufacturing to enhance production efficiency, having established a dedicated R&D team for this purpose [2] Financial Summary - Revenue (million yuan): 2022A: 19,848, 2023A: 23,539, 2024E: 22,244, 2025E: 24,869, 2026E: 27,307 [1] - Net profit (million yuan): 2022A: 1,163, 2023A: 1,179, 2024E: 919, 2025E: 1,062, 2026E: 1,184 [1] - ROE (%): 2022A: 14.1, 2023A: 12.8, 2024E: 9.4, 2025E: 10.1, 2026E: 10.3 [1] - EPS (latest diluted, yuan): 2022A: 1.69, 2023A: 1.71, 2024E: 1.33, 2025E: 1.54, 2026E: 1.72 [1] Operational Insights - The company reported a gross margin of 10.71% and a net margin of 4.14% for the first half of 2024, with a slight increase in gross margin year-on-year [2] - The operating cash flow for the first half of 2024 was -45.16 million yuan, a decline of 106.91% year-on-year, primarily due to decreased revenue [2] - The company has made significant investments in smart manufacturing technologies, including automated cutting and welding systems, to improve operational efficiency [2]