坚朗五金：新品逆势增长

Investment Rating - The investment rating for the company is "Buy" and is maintained [4]. Core Views - The company achieved approximately 3.2 billion yuan in revenue for the first half of 2024, a year-on-year decrease of 4%, with a net profit attributable to shareholders of about 0.05 billion yuan, down 62% year-on-year [4][5]. - The revenue for Q2 2024 was approximately 1.8 billion yuan, representing an 8% year-on-year decline, while the net profit attributable to shareholders was about 0.5 billion yuan, down 26% year-on-year [4]. - The decline in revenue is primarily attributed to the downturn in construction completions, although new product revenues have shown growth against this trend [4]. Summary by Sections Revenue and Profitability - The company's revenue growth over the past four quarters has been 2%, 1%, 1%, and -8%, indicating a weakening revenue margin due to declining construction area [4]. - The revenue from door and window system products accounted for approximately 51% of total revenue, with specific revenues of 1.39 billion yuan and 240 million yuan for door hardware and supporting components, respectively, both showing declines of 16% and 19% year-on-year [4]. - New product categories, including home products and other construction hardware, generated revenues of 590 million yuan and 520 million yuan, respectively, reflecting year-on-year growth of 14% and 17% [4]. Market Performance - Revenue from the Hong Kong, Macau, and Taiwan regions, as well as overseas markets, was approximately 360 million yuan, showing a year-on-year increase of 9%, while revenue from mainland China decreased by 6% [4]. - The company has established 16 overseas warehouses to replicate its domestic sales model, allowing for quicker response to customer supply needs [4]. Margins and Costs - The gross margin for the first half of the year was approximately 31.3%, unchanged year-on-year, with a slight increase to 31.9% in Q2 [4]. - The gross margin for door and window hardware systems remained stable at around 40%, with a slight year-on-year increase, while the gross margin for home products was approximately 29%, down 1 percentage point [4]. - The company’s operating expense ratio was about 27.9%, up 0.4 percentage points year-on-year, with a decrease in sales expense ratio due to a reduction in personnel [4]. Cash Flow and Financial Health - The cash collection ratio slightly decreased, but the company achieved positive cash flow in a single quarter [5]. - The cash flow from operating activities for the first half of the year was -200 million yuan, with Q1 and Q2 cash flows of -600 million yuan and 400 million yuan, respectively [5]. - The company is focused on optimizing efficiency and has projected net profits of approximately 310 million yuan and 400 million yuan for 2024 and 2025, respectively, corresponding to valuations of 25 and 19 times [5].