occurrences

The company released the 2024 three-quarter report forecast. The expected revenue for the first three quarters of 2024 is 4.03-4.19 billion yuan, up 25%-30% year on year; net profit due to mother is 2.02-2.1 billion yuan, up 25%-30% year on year; net profit without return to mother is estimated to be 1.88-1.96 billion yuan, up 31% to 36% year on year.

1. Downstream demand improved, and performance continued to recover and improve

According to the performance forecast, 2024Q3 expects operating income of 1.42-1.48 billion yuan, a year-on-year increase of 20%-25%; net profit due to mother is 0.69-0.72 billion yuan, an increase of 18%-23%; net profit without return to mother is expected to be 0.65-0.68 billion yuan, an increase of 22%-27% year-on-year.

We expect desktop communication terminal inventories to be at a healthy level, benefiting from the recovery in demand in Europe and the US, and are expected to maintain a steady growth rate. Conference products and cloud office terminals are expected to continue to grow rapidly under the product matrix of many conference room all-purpose terminal products and iteratively upgraded BH business headsets.

2. In 2024, focusing on the three strategic directions of “full-scene coverage, all-round terminals, and intelligent transformation”, the company will continue to launch high-quality new products. In 2024, the company will take “full-scene coverage, all-purpose terminals, and intelligent transformation” as the three strategic directions. In 2024, it will mainly launch next-generation smart conference terminal products such as professional audio and video conferencing tablets, conference room series products, and core cameras/microphones/speakers. At the same time, headphone products will also launch new products in the wired, DECT wireless, and Bluetooth wireless categories to gradually improve the product matrix.

Recently, the company launched professional products such as CP50 & CPE40, a professional video conferencing omnidirectional microphone; at the same time, at the Integrate 2024 exhibition in Australia in August, it exhibited new MVC third-generation solutions, MB solutions, and MDEP A40 products, and participated in the Southeast Asia InfoComm Asia 2024 exhibition to showcase Yilian Pro AV solutions, BYOD solutions, and a full range of headsets and personal device products, and actively expand overseas markets such as Australia, New Zealand and Southeast Asia.

3. The 2024 equity incentive plan highlights the company's confidence in development

The company announced the 2024 restricted equity incentive plan. The 2024-2025 fiscal year will be used as the assessment year. The 2024/2025 operating income and net profit growth rate will be no less than 20%/40% based on 2023 operating income and net profit, respectively. The assessment goals of the company's current equity incentive plan show the company's development confidence in the steady recovery of performance.

4. Investment suggestions:

As the world's leading provider of communication and collaboration solutions, after experiencing an inventory removal cycle, downstream demand and performance were gradually repaired, referring to the company's latest equity incentive plan and maintaining profit forecasts. The estimated revenue for 2024-2026 was 5.22/6.33/7.79 billion yuan, respectively, and earnings per share were 1.91/2.31/2.86 yuan, respectively, corresponding to the closing price of 40.53 yuan/share on October 14, 2024. PE was 21.2/17.6/14.2 times, respectively, maintaining the “gain” evaluation grade.

5. Risk warning:

Risk of exchange rate fluctuations; shortage of raw materials and risk of price increases; sales volume of commercial headsets and conference tablets falling short of expectations; overseas market expansion falls short of expectations; increased risk of industry competition; systemic risk.