KFMI(SZ:300666)2024-09-03 03:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of RMB 49.03, indicating an expectation for the stock to outperform the market index by 10%-20% in the next 6-12 months [4]. Core Insights - The company reported a significant revenue growth of 35.91% year-on-year for the first half of 2024, achieving RMB 1.627 billion, with a notable increase in net profit and a remarkable growth in non-recurring net profit by 73.49% [2][6]. - The company is actively expanding its production capacity in ultra-pure sputtering targets and precision components, which are key areas in the semiconductor industry, contributing to its strong performance [2][3]. - The gross margin improved to 31.00%, up 2.34 percentage points year-on-year, driven by efficient cost management and increased revenue [2][6]. Financial Performance Summary - For the first half of 2024, the company achieved a net profit of RMB 161 million, a 5.32% increase year-on-year, while the non-recurring net profit reached RMB 170 million, reflecting a 73.49% growth [2][6]. - In Q2 2024, the revenue was RMB 855 million, a 35.18% increase compared to Q2 2023, with net profit and non-recurring net profit growing by 4.61% and 61.14%, respectively [2][6]. - The company’s revenue from ultra-pure sputtering targets reached RMB 1.069 billion in H1 2024, marking a 37.33% increase, while precision components revenue surged by 96.14% to RMB 399 million [2][6]. Business Outlook - The company is positioned as a key supplier of high-purity sputtering targets for major semiconductor manufacturers, with ongoing projects expected to enhance its production capabilities [2][3]. - The establishment of a subsidiary in South Korea and the construction of a new semiconductor target production facility are anticipated to strengthen the company's international competitiveness and supply chain stability [2][3]. - The diversified product system, including ultra-pure metal sputtering targets, precision components, and third-generation semiconductor materials, is expected to drive continued revenue growth [2][3]. Valuation - The report forecasts earnings per share (EPS) of RMB 1.23, RMB 1.68, and RMB 2.28 for 2024, 2025, and 2026, respectively, with corresponding price-to-earnings (PE) ratios of 41.2, 30.1, and 22.2 [2][3].