Appo(688007) 申万宏源·2024-09-03 07:43Investment Rating - The investment rating for the company is "Outperform" [4]. Core Insights - The company's main business remains profitable, despite losses from associated companies and legal fees impacting overall performance. In H1 2024, the company achieved revenue of 1.081 billion yuan, a year-on-year increase of 1%, but net profit attributable to shareholders dropped by 85% to 11 million yuan [4][5]. - The strategic transformation of the company is yielding results, with significant reductions in losses for its subsidiary, Fengmi. The automotive optical business is experiencing rapid growth, with H1 2024 revenue reaching 241 million yuan [4][5]. - The company has improved its expense ratio significantly in H1 2024, with a gross margin of 31.05%, despite a year-on-year decline of 6.65 percentage points [4][5]. - The company has initiated three share repurchase plans this year, reflecting confidence in its operational performance and future prospects [4][5]. - The company is expected to continue expanding its automotive business, which is projected to contribute significantly to revenue and profit growth in the coming years [4][5]. Summary by Sections Financial Performance - In H1 2024, the company reported total revenue of 1.081 billion yuan, with a year-on-year growth of 0.8%. The net profit attributable to shareholders was 11 million yuan, down 85.4% year-on-year [5][6]. - The company anticipates revenue growth of 16.6% in 2024, with projected net profits of 100 million yuan, reflecting a slight decline of 3.0% compared to the previous year [5][6]. Business Segments - The automotive optical segment achieved a revenue of 241 million yuan in H1 2024, with significant contributions from new product applications in mainstream vehicle models [4][5]. - The cinema business generated 267 million yuan in revenue, providing stable cash flow, while the professional display segment maintained steady growth with revenues of 201 million yuan [4][5]. Strategic Initiatives - The company has implemented a proactive approach to adjust its C-end business strategy, resulting in a significant reduction in losses for Fengmi, which reported a loss of 48.5 million yuan in H1 2024, a reduction of 30.7 million yuan year-on-year [4][5]. - The company is focusing on enhancing its R&D investments, particularly in the automotive optical sector, to support future growth [4][5].