Brief performance review
On April 29, the company released its quarterly report for the year 24. The 24Q1 company achieved revenue of 151 million yuan (-3.54% YoY) and net profit to mother of 06 million yuan (-72.75% YoY); net profit after deduction was -0.07 billion yuan.
Management analysis
The 24Q1 performance was under pressure due to multiple factors. According to the announcement, 24Q1 achieved net profit of 06 million yuan, a sharp decline over the previous year, mainly due to: 1) the company increased R&D investment: 24Q1's R&D expenses reached 43 million yuan, +41.57% year-on-year, R&D expenses reached 28.52%; 2) depreciation of the new factory led to increased management expenses: during the reporting period, depreciation of the company's Shanghai subsidiary plant depreciation and depreciation of the assets used by the Malaysian subsidiary were included in management expenses. The sharp increase on the cost side put pressure on the company's performance.
Driven by the volume of high-end instruments, profitability remains high. According to the announcement, the 24Q1 company's gross margin was 54.81%, +0.58pcts year-on-year. High-end instruments promoted the company's overall profit level to maintain a high level. As new products continue to be released, the overall gross margin level is expected to increase further. We expect the company's gross margin to be 57.8%/59.2%/60.3% in 24-26.
It is proposed to acquire Endurance Electronics to achieve synergy in multiple dimensions. According to the announcement, the company plans to issue shares to purchase 67.7% of Beijing Naisu Electronics. Endurance Electronics focuses on the development and application of digital array systems, providing professional electronic measuring equipment and system solutions in the fields of remote sensing detection, quantum information, radio astronomy, microwave communication, etc. According to the announcement, in 23 years, Naishu Electronics achieved revenue and net profit of 0.49 million yuan and 20 million yuan. We believe this acquisition is expected to strengthen the company's solution capabilities.
Profit Forecasts, Valuations, and Ratings
According to the announcement, we have adjusted our profit forecast. In 2024-2026, the company's revenue is expected to be 770/920/1,098 million yuan, net profit to mother is 1.29/1.70/215 million yuan, and the corresponding PE is 47/36/28X, maintaining the “buy” rating.
Risk warning
The risk of a shortage of raw materials, the progress of fund-raising projects falling short of expectations, the expansion of high-end products falling short of expectations, the risk of restricted stocks being lifted, and the risk of exchange rate fluctuations.