万年青：产品量价回落，1H24盈利承压

Investment Rating - The investment rating for the company is maintained at "Buy" with a target price of RMB 4.92 [1]. Core Views - The company's net profit for 1H24 was RMB 1.51 million, a year-on-year decrease of 99.4%, which aligns with the earnings forecast [1]. - In 2Q24, the company achieved a net profit of RMB 10.87 million, marking a quarter-on-quarter turnaround [1]. - The report anticipates a recovery in cement prices as the peak season approaches, which is expected to support a marginal recovery in earnings for 2H24 [1]. - Despite ongoing demand pressures, there is a clearer consensus in the industry regarding proactive supply optimization to stabilize profitability [1]. Financial Performance Summary - In 1H24, the cement business generated revenue of RMB 1.62 billion, down 41.7% year-on-year, with a gross margin of 14.1%, a decrease of 4.6 percentage points [2]. - The ready-mixed concrete business reported revenue of RMB 730 million, down 32.7% year-on-year, with a gross margin of 12.5%, a decline of 4.7 percentage points [2]. - Aggregate business revenue increased by 7.2% year-on-year to RMB 150 million, but gross margin fell by 14.0 percentage points to 20.9%, resulting in a gross profit decline of 35.9% to RMB 31.91 million [2]. - Total sales, management, R&D, and financial expenses for 1H24 amounted to RMB 330 million, a decrease of 10.6% year-on-year, partially mitigating the impact of declining sales and prices [2]. Market Conditions - The Jiangxi cement market has shown signs of price recovery since mid-August, following a period of decline from January to July 2024 [3]. - As of September 6, the average price in Jiangxi for 2H24 was still RMB 24 lower per ton compared to the average in 1H24 [3]. - The report suggests that supply optimization efforts in the industry will likely enhance price recovery as the peak season approaches, with expectations for significant price increases in 4Q24 [3]. Balance Sheet Strength - As of the end of 1H24, the company had cash on hand of RMB 3.79 billion, with net cash of RMB 1.23 billion after deducting interest-bearing liabilities, indicating a strong balance sheet [4]. - This financial strength is expected to provide the company with a competitive advantage in the market as conditions stabilize [4].