Introduction to this report:

Q3 Revenue is growing steadily, and domestic and international vehicle gas sensor projects are being implemented at a targeted pace. Benefiting from increased demand for automotive safety and comfort, performance is expected to remain high.

Key points of investment:

Maintain the “increase in holdings” rating and maintain the target price of 99.60 yuan. The company's gas sensor business fully implemented the “1+4" strategy, opened up room for growth, and maintained an EPS of 2.41/3.32/4.93 yuan in 23-25. Considering that the company has been targeted by vehicle projects one after another, the total amount reached 548 million yuan, giving it 30 times PE in 2024 and maintaining the target price of 99.60 yuan.

Q3 Revenue is growing steadily, and the accelerated release of in-vehicle sensors is expected to drive performance to maintain a high level of growth.

23Q3 had revenue of 164 million yuan, YOY +13%, and QOQ +11%; achieved net profit of 30 million yuan, YOY +1.02%, and QOQ -10.5%. Overall, steady growth was mainly due to the expansion of various new businesses, mainly benefiting from the accelerated implementation of targeted vehicle gas sensor projects.

The gross margin of 23Q3 was 42.90%, down 2.2 pcts from the previous month and up 3.3 pcts from the previous year, mainly due to the gradual increase in the share of high-end gas analysis instruments and other businesses with high gross margin.

The targeted implementation of domestic and foreign vehicle gas sensor projects has accelerated. Benefiting from increased demand for safety and comfort in automobiles, performance is expected to maintain a high level of growth. According to the company's voluntary disclosure report, the company received 3 project targeted notices from an internationally renowned automobile air conditioning company to supply vehicle PM2.5 sensors. The project life cycle is 7 years, and the total amount is about 128 million yuan (tax included). The subsidiary Sifang Automotive Electronics has also received 1 project target from a well-known domestic new energy OEM to supply in-vehicle CO2 sensors. The target includes 4 model platforms. The life cycle is 5 years, and the total amount is about 420 million yuan (tax included).

catalysts. The pace of introduction of new automotive customers is accelerating; the wave of intelligence is accelerating.

Risk warning: Technology development progress falls short of expectations; market competition is intensifying.