大华股份：海外和创新业务快速增长

Investment Rating - The report maintains a Buy rating for the company with a target price of 21.20 RMB [2][7] Core Views - The company's revenue in the first half of the year increased by 2% YoY to 14.9 billion RMB, while net profit attributable to the parent company decreased by 8% YoY to 1.81 billion RMB [1] - Gross margin remained stable at 41.3% since 2023, and operating cash flow was -507 million RMB, better than the pre-pandemic average [1] - Domestic business revenue declined by 5% YoY to 7.38 billion RMB, with government business revenue dropping by 15% YoY to 800 million RMB due to cautious local government investments and slowing demand in traditional industries [1] - Overseas business revenue grew by 9% YoY to 7.49 billion RMB, accounting for over 50% of total revenue for the first time, with strong growth in Latin America and Europe [1] - Innovative business revenue increased by 9% YoY to 2.46 billion RMB, driven by machine vision, mobile robotics, and automotive electronics [1] Financial Performance and Forecast - Revenue is expected to grow by 8% YoY in 2024E to 34.87 billion RMB, with further growth of 13% YoY in 2025E and 2026E [3] - Net profit attributable to the parent company is forecasted to be 3.49 billion RMB in 2024E, 4.31 billion RMB in 2025E, and 4.94 billion RMB in 2026E [3] - Gross margin is projected to remain stable at around 41.6% from 2024E to 2026E [3] - EPS is expected to be 1.06 RMB in 2024E, 1.31 RMB in 2025E, and 1.50 RMB in 2026E [3] Business Segments Domestic Business - Government business revenue declined by 15% YoY to 800 million RMB, but opportunities are expected from increased government spending and AI applications [1] - Enterprise business revenue remained flat at 3.9 billion RMB, with strong growth in industrial and energy sectors, but weakness in construction, education, and finance [1] - Distribution business saw a slight decline due to weak market demand, but the company is optimizing its channel ecosystem and launching new products [1] Overseas Business - Overseas revenue grew by 9% YoY to 7.49 billion RMB, with a focus on expanding channel networks and promoting solutions in smart cities, transportation, and energy [1] - The company plans to adopt a "one country, one policy" approach to address manufacturing and supply chain challenges [1] Innovative Business - Revenue from innovative businesses grew by 9% YoY to 2.46 billion RMB, with contributions from machine vision, mobile robotics, and automotive electronics [1] - The company is strengthening R&D and expanding product lines to penetrate core business systems [1] Valuation and Peer Comparison - The company's 2024E PE ratio is 12.8x, compared to an average of 19.89x for peers [8] - The target price of 21.20 RMB is based on a 20x PE multiple for 2024E [2][7] Key Financial Ratios - ROE is expected to be 9.6% in 2024E, 10.9% in 2025E, and 11.4% in 2026E [3] - Net profit margin is forecasted to be 10.0% in 2024E, 11.0% in 2025E, and 11.1% in 2026E [3] - The company's debt-to-asset ratio is expected to remain stable at around 32% from 2024E to 2026E [3]