HONGLU(002541) Orient Securities·2024-10-23 09:38Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 20.85 CNY based on a 15X PE for 2024 [2][5]. Core Views - The company signed new sales contracts totaling approximately 21.93 billion CNY in the first three quarters of 2024, a decrease of 4.3% compared to the same period in 2023, with Q3 contracts amounting to 7.57 billion CNY [1]. - The production of steel structure products reached approximately 3.251 million tons, a slight increase of 0.58% year-on-year, with Q3 production at about 1.145 million tons [1]. - The decline in steel prices has impacted contract amounts, but actual order volumes may have increased. The average price of I-beams in China fell by 7% year-on-year to 3966 CNY/ton in Q1-Q3 2024, suggesting that excluding price factors, order volumes could still show growth [1]. - The company is focusing on smart manufacturing to enhance its core competitiveness, with R&D expenses rising to 330 million CNY, a 62.5% increase year-on-year, impacting net profit margins [1]. Financial Summary - The forecasted net profit attributable to the parent company for 2024-2026 is 960 million, 1.038 billion, and 1.129 billion CNY respectively, down from previous estimates of 1.6 billion and 1.8 billion CNY for 2024-2025 [2][5]. - Revenue for 2024 is expected to be 21.789 billion CNY, a decrease of 7.4% year-on-year, with a projected revenue of 23.477 billion CNY in 2025 and 24.345 billion CNY in 2026 [4]. - The gross margin for the first half of 2024 is 10.7%, a slight increase of 0.1 percentage points year-on-year, while the net margin is projected to decline to 4.4% in 2024 [1][4].