occurrences
The company released its 2024 semi-annual report. During the reporting period, it achieved operating income of 13.849 billion yuan, a year-on-year decrease of 7.02%; net profit to mother of 0.217 billion yuan, an increase of 8.68% over the previous year; net profit after deducting non-return to mother of 0.214 billion yuan, an increase of 8.71% year-on-year. Among them, 2024Q2 achieved operating income of 8.791 billion yuan, down 11.01% year on year and 73.77% month on month; net profit to mother of 0.176 billion yuan, up 8.16% year on year, up 323.33% month on month; net profit without return to mother of 0.172 billion yuan, up 8.32% year on year, up 311.45% month on month.
Management expenses were optimized month-on-month, and net interest rates increased month-on-month
With 2024Q2, the company's management expenses reached 73.809 million yuan, down 21.56% from the previous month; the management expenses ratio reached 0.84%, down 1.02 pcts from month to month. The company's 2024Q2 net margin reached 1.99%, up 0.28 pct year on year and 1.18 pct month on month.
Consolidate the main optical communication industry and accelerate the expansion of computing power business
In response to structural changes in operator customer investment, the company is consolidating the main optical communication business while accelerating the business expansion of products and solutions related to computing power. 2024H1, the company won the bid for China Unicom's ROADM 400G OTN collection project, stabilizing its position as a core supplier of 400G OTN networks; FTTR products won the bid for multiple competitive projects within the province to achieve large-scale shipments; seizing opportunities for intelligent grid upgrading, and winning the bid for several national grid collection projects.
New products continue to be launched
In the field of optical communication, the company, together with Pengcheng Laboratory and other institutions, released an ultra-high-capacity real-time transmission system based on air core optical fiber to achieve a maximum transmission capacity of over 270 Tbit/s for single-fiber bidirectional transmission of the same wavelength; 400G C+L band ultra-long-distance transmission system technology to achieve commercial implementation of trunk lines. In the field of marine communications, the company has successfully developed a variety of new equipment with independent intellectual property rights, and completed customer acceptance and product delivery. The company's computing power business continues to grow, and servers have achieved breakthroughs in new financial fields on the basis of consolidating markets such as operators and financial industries.
Steady growth in performance, maintaining a “buy” rating
We expect the company's revenue for 2024-2026 to be 36.49/41.358/46.926 billion yuan, with year-on-year growth rates of 17.22%/13.34%/13.46%, respectively; net profit to mother of 0.68/0.902/1.08 billion yuan, respectively, with year-on-year growth rates of 34.50%/32.76%/19.71%, 3-year CAGR of 28.82%; EPS 0.57/0.76/0.91 yuan/share, respectively. The company's performance grew steadily, the expansion of the computing power business accelerated, new products continued to be launched, and the “buy” rating was maintained.
Risk warning: Product demand falls short of expected risk; technology development falls short of expected risk.