WST(SH:688122)2024-09-09 23:40Investment Rating - The report maintains a "Recommended" rating for the company [3][2]. Core Views - The company's Q2 performance shows improvement with a significant increase in orders for superconducting products, indicating a positive trend in revenue and profitability [1][2]. - The company is increasing its R&D investment to maintain technological leadership, which is expected to enhance its core competitiveness [1]. - The superconducting business is experiencing a surge in external orders, with a revenue increase of 19.95% year-on-year [1]. Financial Performance Summary - For the first half of 2024, the company achieved a revenue of 2.02 billion yuan, a year-on-year decrease of 4.33%, and a net profit attributable to shareholders of 348 million yuan, down 17.24% year-on-year [1]. - The gross margin for the first half of 2024 was 32.0%, a slight decrease of 0.3 percentage points year-on-year [1]. - In Q2 2024, the company reported a revenue of 1.23 billion yuan, representing a year-on-year increase of 3.13% and a quarter-on-quarter increase of 54.60% [1]. - The net profit for Q2 2024 was 238 million yuan, up 11.83% year-on-year and up 115.39% quarter-on-quarter [1]. Business Segment Analysis - The superconducting business generated a revenue of 482 million yuan in the first half of 2024, reflecting a year-on-year increase of 19.95% [1]. - The high-end titanium alloy materials segment reported a revenue of 1.28 billion yuan, a slight decline of 4.07% year-on-year, but with improved sales quarter-on-quarter [1]. - The high-performance high-temperature alloy materials segment saw a revenue decrease of 44.67% year-on-year, but the company has achieved product certification for key grades, indicating potential for recovery [1]. Inventory and Contract Liabilities - The company's inventory balance at the end of the first half of 2024 was 3.45 billion yuan, showing a slight decrease from Q1 but an increase from the beginning of the year [1]. - Contract liabilities increased significantly to 292 million yuan, up 106.5% from the beginning of the year, primarily due to advance payments received for superconducting products [1]. Future Outlook - The company is expected to see continued demand for superconducting products and a recovery in the high-end titanium alloy sector, with projected net profits of 912 million yuan, 1.11 billion yuan, and 1.30 billion yuan for 2024, 2025, and 2026 respectively [2][9]. - The report forecasts earnings per share (EPS) of 1.40 yuan, 1.71 yuan, and 2.00 yuan for the same years, with corresponding price-to-earnings (P/E) ratios of 24.96, 20.51, and 17.48 [2][9].