Target price of 20.68 yuan, reaffirming the “buy” rating
Su Test released a quarterly report. In Q1 of 2024, revenue of 442 million yuan (yoy +1.03%, qoq -25.06%), net profit to mother was 42.1728 million yuan (yoy -4.86%, qoq -55.11%), deducting non-net profit of 40.2065 million yuan (yoy -1.81%). We expect the company's net profit to be 394/497/611 million yuan in 2024 to 2026, including 3.94 billion yuan for services and 84 million yuan for equipment in 2024. According to the segmented valuation method, considering that Sutest's ROE is higher than the average value of comparable service companies, the 2024 service 27.1xPE/equipment 25.2xPE (average value of a comparable company 22.6/25.2x) was given, and the target price was 20.68 yuan (previous value 21.24 yuan), reaffirming the “buy” rating.
The expense ratio increased to 31.1% during the 1Q24 period, net interest rate -1.6pp to 10.2% 1Q24, the company's gross margin yoy-1.0pp to 42.5%, and credit impairment losses rushed back 4.61 million yuan (1Q23:
(Accrued impairment of $1.03 million), mainly due to an increase in pre-period accounts receivable recovered. The cost ratio increased slightly during the period, +2.2pp to 31.1% year over year. Among them, sales/management/R&D/finance expenses were 8.1/13.2/7.9/ 1.9%, respectively, +1.3/-0.2/+1.0/+0.1pp, respectively, and the net margin was -1.6 pp to 10.2% year on year.
Qualcomm certified to expand mobile phone authentication capabilities
On April 8, Sutetuo, a subsidiary of Sutest, passed the Qualcomm review for the SAR team and obtained an authorization certificate for Qualcomm Sub6G Smart Transmit. After expanding this qualification, the company will provide mobile phone manufacturer customers with more complete regulatory certification solutions. Located in Baoan, Shenzhen, Sutetuo provides customers with CE, FCC, IC, MIC, CTIA OTA, GCF and PTCRB testing and certification services. It has rich industry experience and industry-leading equipment, covering cutting-edge technologies such as GSM/WCDMA/LTE/5GNR/BT/Wi-Fi/SRD.
Risk warning: Customer R&D funding growth fell short of expectations, laboratory order processing progress fell short of expectations, and increased market competition led to lower profit margins than expected.