PRCO(SZ:002225) Zhongyuan Securities·2024-09-03 08:21Investment Rating - The report maintains an "Accumulate" rating for the company, indicating a projected increase of 5% to 15% relative to the CSI 300 index over the next six months [14]. Core Insights - The company reported a slight revenue growth of 2.54% year-on-year for the first half of 2024, achieving operating income of 2.698 billion yuan [2][3]. - The net profit attributable to shareholders decreased by 8.16% year-on-year to 133 million yuan, with a significant drop of 27.37% in the net profit after deducting non-recurring items [2][3]. - The company is actively expanding its overseas business, with sales revenue from international markets reaching 726 million yuan, showing a minor increase of 0.16% year-on-year [4]. Revenue Performance - The revenue breakdown by product shows functional, shaped, unshaped refractory materials, and others generating 625 million, 1.042 billion, 534 million, and 497 million yuan respectively, with varying growth rates [2]. - The steel division's revenue slightly declined by 0.79% to 2.319 billion yuan, while the raw materials division saw a significant increase of 79.12% to 403 million yuan [2]. Profitability and Cash Flow - The overall gross margin for the first half of 2024 was 19.07%, a decrease of 1.15 percentage points compared to the previous year [3]. - Operating cash flow improved significantly, reaching 241 million yuan, an increase of 88.4% year-on-year, attributed to better receivables management and cost control [3]. Strategic Developments - The company is focusing on expanding its active magnesium oxide business, with several experimental orders already secured [4]. - The establishment of magnesium raw material bases in Tibet, Qinghai, and Xinjiang is expected to stabilize raw material supply and control production costs [3][4]. Financial Forecast - The projected operating revenues for 2024-2026 are 5.610 billion, 5.851 billion, and 6.143 billion yuan respectively, with net profits expected to be 237 million, 266 million, and 281 million yuan [4][5]. - The earnings per share (EPS) forecast for the same period is 0.23, 0.26, and 0.28 yuan, with corresponding price-to-earnings (PE) ratios of 13.62, 12.13, and 11.46 [4][5].