Anhui Estone Materials Technology (SH:688733) Changjiang Securities·2024-09-09 06:10Investment Rating - The investment rating for the company is "Buy" and is maintained [3]. Core Views - The company reported a revenue of 239 million yuan for the first half of 2024, representing a year-on-year growth of 10.63%. However, the net profit attributable to shareholders decreased by 50.19% to 6 million yuan. After excluding non-recurring items, the net profit was -8 million yuan, indicating a reduction in losses [3][4]. - In Q2 2024, the company achieved a revenue of 125 million yuan, a year-on-year increase of 14.27%. The net profit attributable to shareholders was 24 million yuan, showing a significant growth of 2463%, while the net profit after excluding non-recurring items was 16 million yuan, up 316.6%, indicating a turnaround in profitability [3][4]. Summary by Sections Financial Performance - For the first half of 2024, revenue from battery materials was 168 million yuan, down 5.35% year-on-year, primarily due to price reductions in barium stone and production halts in Q1 2024. The sales structure's proportion decreased by 12 percentage points [4]. - Revenue from electronic materials and flame-retardant materials was 50 million yuan and 20 million yuan, respectively, with year-on-year growth of 72.9% and 113.7%. Overseas revenue reached 44 million yuan, further increasing its share to 18% [4]. - The overall gross margin remained stable at 23.66%, showing no significant year-on-year change despite a decline in production rates and product price adjustments [4]. Product Insights - In Q2 2024, barium stone shipments are expected to increase significantly, with high capacity utilization rates maintained. The annual shipment forecast remains unchanged. The price of barium stone slightly decreased quarter-on-quarter but showed a significant year-on-year decline, mainly due to delayed price adjustments from small customers [4]. - The gross margin in Q2 2024 improved significantly, attributed to the reversal of share-based payment expenses from 2022 and effective cost reduction measures. After excluding the impact of share-based payments, the estimated operating profit per ton of barium stone remains marginally profitable [4]. Future Outlook - Looking ahead to the second half of the year, it is anticipated that barium stone production will further recover, with customer price reduction expectations materializing, leading to price stabilization. With increased capacity utilization and internal cost reductions, a profitability inflection point is expected [4]. - New technology developments in Low-α alumina, high-purity quartz sand, and flame-retardant foam are expected to achieve breakthroughs within the year, fulfilling the logic of material platformization. Long-term prospects for solid oxide and other new technology reserves are expected to contribute to medium- to long-term growth [4].