Shanghai Liangxin Electrical (SZ:002706) Changjiang Securities·2024-09-04 06:42Investment Rating - The investment rating for the company is "Buy" and is maintained [2]. Core Views - The company reported a revenue of 2 billion yuan for the first half of 2024, a year-on-year decline of 11%, with a net profit attributable to shareholders of 240 million yuan, down 14% year-on-year [2]. - In Q2 2024, revenue was 1.07 billion yuan, reflecting a 20% year-on-year decrease, while net profit was 150 million yuan, down 23% year-on-year [2]. - The decline in revenue is attributed to weak demand in downstream sectors, particularly in real estate and industrial-related areas, although growth is expected in the renewable energy sector driven by demand for photovoltaic and energy storage installations [2][3]. - The gross profit margin for H1 2024 was 32.3%, down 1.1 percentage points year-on-year, primarily due to rising raw material costs and a shift in revenue mix towards lower-margin renewable energy products [2]. - The company is actively pursuing transformation strategies to mitigate risks, with expectations for growth in its "smart distribution," "smart home," and renewable energy segments, which are anticipated to support recovery in operations [3]. Financial Summary - For H1 2024, the company had a net operating cash inflow of approximately 124 million yuan and capital expenditures of about 125 million yuan, indicating ongoing capacity expansion efforts [3]. - The company’s contract liabilities increased to 39 million yuan by the end of H1 2024, showing a rise both year-on-year and quarter-on-quarter [3]. - Profit forecasts for 2024 and 2025 are projected at 510 million yuan and 630 million yuan, respectively, corresponding to price-to-earnings ratios of approximately 12 times and 10 times [3].