JIULI Hi-tech(002318) AVIC Securities·2024-09-06 06:36Investment Rating - The investment rating for the company is "Buy" [2][12]. Core Views - The report highlights that the company's overseas expansion is showing results, particularly in the composite pipe business, which has seen significant growth [2]. - The company achieved a revenue of 4.83 billion yuan in H1 2024, representing a year-on-year increase of 28.3%, while the net profit attributable to shareholders was 644 million yuan, a decrease of 9.6% year-on-year [2]. - The composite pipe business has grown impressively, with revenue reaching 642 million yuan, a year-on-year increase of 5335% [2]. Summary by Sections Performance Overview - In H1 2024, the company reported a revenue of 4.83 billion yuan, up 28.3% year-on-year, and a net profit of 644 million yuan, down 9.6% year-on-year. The adjusted net profit was 653 million yuan, up 34.0% year-on-year, with an EPS of 0.67 yuan [2]. - Q2 2024 revenue was 2.44 billion yuan, a 17.1% increase year-on-year and a 2.2% increase quarter-on-quarter, with a net profit of 316 million yuan, down 34.1% year-on-year [2]. Business Segments - The company has shown strong growth in the oil and gas chemical sector, with revenue of 3.0 billion yuan, a year-on-year increase of 39.3%. The composite pipe segment has also performed well, with a revenue increase of 5335% [2]. - The revenue breakdown by product shows seamless pipes at 2.08 billion yuan (up 20.9%), welded pipes at 1.07 billion yuan (down 16.0%), composite pipes at 642 million yuan (up 5335%), fittings at 388 million yuan (up 37.9%), and alloy materials at 345 million yuan (up 177%) [2]. Profitability Analysis - The company's gross margin and net margin for H1 2024 were 24.9% and 13.8%, respectively, with the net margin showing a year-on-year decline due to a high base effect from the previous year [2]. - The gross margin for seamless pipes was 30.0% (up 1.15 percentage points), while the gross margin for composite pipes improved to 24.3% (up 29.7 percentage points) [2]. Market Expansion - The company has actively expanded into emerging markets, with overseas revenue growing by 61.3% year-on-year, significantly outpacing domestic growth of 15.8% [2]. - The report emphasizes the company's strategic positioning in high-end stainless steel pipe manufacturing and its proactive approach to capturing future industry opportunities [2].