KinLong(SZ:002791) CAITONG SECURITIES·2024-09-05 08:03Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - The company's performance is under pressure due to a decline in real estate projects, with expenses dilution and bad debt provisions impacting earnings [1][5] - In H1 2024, revenue decreased by 4.35% year-on-year to 3.21 billion yuan, and net profit attributable to shareholders fell by 62.02% to 4.89 million yuan [5][6] - The company is diversifying its product offerings to mitigate the impact of declining real estate-related sales [5][6] Financial Performance Summary - H1 2024 revenue by product: - Door and window hardware systems: 1.39 billion yuan, down 16.04% - Home products: 590 million yuan, up 13.67% - Other construction hardware: 518 million yuan, up 16.59% [5][6] - H1 2024 gross margin was 31.27%, a slight increase of 0.08 percentage points year-on-year [6] - H1 2024 operating cash flow showed a net outflow of 190 million yuan, an improvement of 238 million yuan year-on-year [6] Profit Forecast - The company forecasts net profit attributable to shareholders for 2024-2026 to be 271 million, 398 million, and 483 million yuan, respectively, with corresponding EPS of 0.77, 1.13, and 1.37 yuan [6][7] - The projected PE ratios for 2024-2026 are 28.94x, 19.70x, and 16.24x, respectively [6][7] Market Strategy - The company is expanding its market presence by replicating its domestic sales model in overseas markets, targeting emerging countries [5][6] - The company has established 16 overseas warehouses to enhance supply chain responsiveness and has products sold in over 100 countries [6][7]