occurrences

The company released a performance forecast for the third quarter of 2024. It is expected to achieve revenue of 1.48 billion yuan in the first three quarters of 24, an increase of 79.57%; net profit to mother of 0.19 billion yuan, +156.32% year over year; Q3 will achieve revenue of 0.64 billion yuan in a single quarter, an increase of 97.94% year on year, and net profit of 0.09 billion yuan year on year, an increase of 222.05% year on year.

Key points of investment

Performance growth is strong, and the share of new products continues to rise. The company continues to increase product technology innovation, accelerate product iteration, expand product categories, and show that shipments of wearable export products in the driver chip product line continue to improve. The iteration of the company's new wearable products has better won the market. Mobile phone TDDI high-refresh products, new qHD products, and new tablet TDDI products have begun to be shipped one after another. As the share of new products continues to increase, compounded by the peak sales season, it is expected to achieve revenue of 1.48 billion yuan, an increase of 79.57% year on year; net profit to mother of 0.19 billion yuan, +156.32% year on year. Looking at a single quarter, Q3 is expected to achieve revenue of 0.64 billion yuan, an increase of 97.94% year on year, and net profit of 0.09 billion yuan year on year, up 222.05% year on year.

The demand for four-color electronic price tags is strong, and the revenue contribution is outstanding. As demand for digital transformation of traditional supermarket chains increases, the electronic price tag market has ushered in good development opportunities. From 2017 to 2022, the market size expanded significantly, and the global electronic price tag market is expected to exceed 10 billion yuan in 2024. The company's four-color electronic price tag has driven market demand for new products to continue to rise since the first quarter, and the overall layout of the four-color new product company is earlier, with complete products and leading technology, which has led to a rapid increase in revenue.

Investment advice:

We expect the company's 2024-2026 net profit to be 0.3/0.44/0.69 billion yuan, maintaining a “buy” rating.

Risk warning:

Market recovery falls short of expectations; competitive landscape increases risk; product development and technological innovation fall short of expectations; customer introduction falls short of expectations.