HONGLU(SZ:002541) Yong Xing Zheng Quan·2024-09-29 06:08Investment Rating - The investment rating for the company is "Buy" [6][8]. Core Views - The company's revenue for the first half of 2024 reached 10.33 billion, a year-on-year increase of 6.73%, while the net profit attributable to shareholders was 430 million, a year-on-year decrease of 22.58% [5]. - The decline in steel prices has pressured the company's revenue, with the price of hot-rolled coils dropping by 5.5% in the first half of 2024. However, a recovery in steel prices is anticipated in the second half of 2024 due to policies supporting manufacturing, which could enhance profitability [5]. - The company has signed new contracts worth 14.356 billion in the first half of 2024, a decrease of 4.66% year-on-year, indicating weak downstream demand. The production of steel structures was 2.1058 million tons, showing a significant slowdown in growth [5]. - The company is increasing its investment in intelligent transformation, with R&D expenses rising by 1.37 percentage points year-on-year. This transformation is expected to improve production efficiency and reduce costs, thereby strengthening competitive advantages [5]. Summary by Sections Financial Performance - In the first half of 2024, the company reported a net profit of 430 million, down 22.58% year-on-year, and a non-recurring net profit of 240 million, down 47.50% year-on-year. Non-recurring gains included government subsidies of 230 million [5]. - The company's revenue for 2023 is projected at 23.539 billion, with a year-on-year growth rate of 18.6%. However, for 2024, revenue is expected to decline by 2.6% to 22.936 billion [7]. Profitability and Valuation - The estimated earnings per share (EPS) for 2024 is 1.52, with a price-to-earnings (P/E) ratio of 7.36. The projected net profit for 2024 is 1.05 billion, reflecting an 11.0% decrease year-on-year [6][7]. - The company is expected to maintain a return on equity (ROE) of 10.3% in 2024, with a gradual increase in net profit projected for 2025 and 2026 [7][12]. Strategic Outlook - The company is focusing on intelligent transformation to enhance efficiency and profitability. The introduction of welding robots is expected to reduce production costs significantly, addressing labor shortages in the welding workforce [5][6]. - The company’s scale advantages and market position as a leading steel structure manufacturer are expected to provide a strong competitive moat in the industry [6].