Event: The company released its 2024 three-quarter report. In the first three quarters of 2024, the company's revenue was 1.6 billion yuan, +53% YoY; net profit to mother was 0.11 billion yuan, +11% YoY. 2024Q3, the company's revenue was 0.63 billion yuan, +61% YoY, +27% month-on-month; net profit to mother was 0.04 billion yuan, +41% YoY, +76% month-on-month.

Performance was in line with expectations, and downstream demand gradually recovered. According to China Network and China Automobile Association, in Q1-Q3 of 2024, sales of new energy vehicles in the domestic market were 8.32 million units, an increase of 33% over the previous year. Among them, in Q3, domestic NEV sales were 3.38 million units, an increase of 18% over the previous year. Downstream customer demand was good, which led to a high increase in the company's Q3 revenue, achieving +27% month-on-month. In terms of profit margin, in Q1-Q3 2024, the company had a gross sales margin of 22% and a net sales margin of 7%, of which Q3 gross profit margin was 20.8%, -1 pct month-on-month, and a net profit margin of 6.4%, and +1.7 pct month-on-month. We expect that as overseas factories climb the slope, the company will release scale effects to reduce costs and increase efficiency. Q3 The company's sales period expense ratio reached 13%, of which sales, management, R&D, and finance expenses were 1.7%/4.1%/6.3%/0.3%, respectively, and -1/-2/-1pct month-on-month.

Deep technology+excellent products+excellent service, the company enjoys domestic substitution dividends. 1) Deep technical reserves: Based on leading technology accumulated in the communications field, the company has expanded into the fields of new energy vehicles, industry, etc.; 2) Excellent product performance: there is no significant difference between the company's products and overseas leaders, and the product performance is at the leading level in the industry; 3) Fast response: the company's customer response time is 24 hours, the average development speed of new products is 2-4 weeks, and the delivery speed is 2-4 weeks, which is significantly lower than the average of 8-10 weeks for overseas leaders; 4) Excellent customer structure: the company's customers cover North America Strong car companies such as T customers, Daimler, Changan, and NIO have maintained good cooperative relationships with Ningde Times, Honeycomb Energy, and Sunshine Power.

Enrich the product matrix to create new impetus for future performance growth. With connector products as the core, the company continues to develop and iterate. Currently, it can provide customers with integrated connection system solutions in the fields of communications, new energy vehicles, rail transit, medical devices, etc. The company's high-voltage, power exchange, in-vehicle intelligent connectivity, and 5G board-to-board RF connector products are at the leading international or domestic level, and has cooperated deeply with customers such as ZTE, Samsung, Ericsson, and Nokia on 5.5G, and several projects have been targeted. At the same time, the company continues to participate in product research and development in the fields of AI and data centers, intelligent automotive driving, humanoid robots, 6G communications, low-altitude aircraft, liquid cooling systems, commercial satellites, etc., and has now gradually developed related products, continuously enriching the product matrix to help future business development.

Profit forecast and valuation: Considering factors such as the rise in raw material prices in 2024, we lowered the company's net profit to mother for 24-26 to 0.16/0.24/0.32 billion yuan, corresponding to PE 42/29/22 times, respectively.

Risk warning: Downstream sales fall short of expectations, industry competition intensifies, and customer development falls short of expectations.