Incident: The company released the 2024 three-quarter performance forecast. It is expected to achieve net profit of 0.145-0.155 billion yuan in the first three quarters of 2024, up 248.30%-272.32% year on year, after deducting 0.134-0.144 billion yuan in non-return net profit, up 361.88%-396.35% year on year; of these, net profit for the third quarter is expected to achieve 53-63 million yuan, up 30.22%-54.80% year on year, up 3.92% month on month - 23.53%, net profit without return to mother of 50-60 million yuan, up 32.75%-59.29% year on year and 8.70%-30.43% month on month.

24Q3 sales revenue, product unit price, and profit all reached record highs. During the reporting period, the company's sales volume of PU synthetic leather products increased by about 16.1% year on year, sales revenue increased by about 26.2% year on year, and unit sales price increased by about 8.7% year on year. Among them, the sales volume of PU synthetic leather products increased by about 10.2% in the third quarter, sales revenue increased by about 21.6%, and the unit price increased by about 10.4% year on year. It still achieved significant growth on the basis of last year's high base. Benefiting from the sharp rise in the volume and price of the company's products, the company's profitability continued to increase, and 2024Q3's revenue, product unit price and profit all reached record highs. In addition, during the reporting period, the company invested about 0.112 billion yuan in R&D, an increase of about 16.685 million yuan over the previous year, an increase of about 17.4% over the previous year; the government subsidy included current profit and loss was about 16.6312 million yuan, an increase of 2.3734 million yuan over the previous year. The company deepens cooperation with brand customers, the results of customer and product strategies are beginning to show, and the overall competitiveness is steadily improving.

Amway Vietnam has passed the certification of Nike Laboratories in the US, which is conducive to expanding Amway Vietnam's sales revenue. During the reporting period, the company became a supplier of Adidas, Under Armour Equipment Department, and Mousse Co., Ltd., and Amway Vietnam became a qualified supplier for Nike, Adidas, and Lozhibao; cooperation with brands such as Apple, Samsung Electronics, Nike, Puma, Asics, Decathlon, Anta, BYD, and Elsiri deepened, and strategic results for major customers began to show.

Furthermore, in July 2024, the company announced that Amway Vietnam passed the certification and obtained a certification from Nike Laboratories in the United States, which is valid for one year. Nike of the United States has strict control over product quality, and can only obtain an official order if it has the two conditions of US Nike supplier qualification and laboratory certification at the same time. The production capacity of the US Nike shoe division is significant in Southeast Asian countries such as Vietnam and Indonesia. This certification from the US Nike Laboratory will help Amway Vietnam officially accept orders from the US Nike shoe department in Southeast Asian countries such as Vietnam and Indonesia, expand Amway Vietnam's sales revenue, and deepen cooperation between Nike and Amway Vietnam. At the same time, it shows that Amway Vietnam has been recognized by international brands, which has a positive effect on further developing the international brand market.

Categories such as automotive interiors, electronic products, and functional shoe materials are progressing hand in hand and are growing well. During the reporting period, due to adverse factors such as the slump in the housing market and rising shipping costs, some overseas customers delayed or suspended their orders, and their share of the company's revenue changed slightly in the short term. In terms of functional footwear categories, sales of high-end sports shoes such as TPU have increased, and the expansion of large incremental customers has begun to show results, and the category has achieved relatively rapid growth; the company's TPU share in domestic brands such as Anta and Tep has increased, while actively marketing and promoting to other domestic and foreign brands such as Nike and Decathlon, with good gross margin.

Furthermore, the automotive interior and electronics categories showed a good growth trend.

Maintain a “Highly Recommended” investment rating. The company's revenue for 2024-2026 is estimated to be 2.5, 2.96, and 3.33 billion yuan, respectively, and net profit due to mother is 0.197, 0.256, and 0.319 billion yuan, respectively. The PE corresponding to the current stock price is 20.4, 15.7, and 12.6 times, respectively, maintaining a “highly recommended” rating.

Risk warning: Fluctuations in raw material prices and natural gas prices, exchange rate fluctuations, and payment risks of trust products.