Event: The company released its three-quarter 2024 report:

1) First three quarters: revenue of 18.91 billion yuan, +25.4% year on year; net profit of 2.38 billion yuan, +544.7% year on year; net profit of non-return to mother 2.29 billion yuan, +1665.8% year on year. Gross profit margin 29.6%, +8.3pct year on year; net profit margin 12.5%, +10.1pct year on year.

2) 24Q3: Revenue 6.82 billion yuan, +9.6% YoY, +5.7% month-on-month; net profit to mother 1.01 billion yuan, +368.3% YoY, +24.6% month-on-month; net profit without return to mother 0.92 billion yuan, +341.0% YoY, +14.3% month-on-month.

Gross profit margin 30.4%, +8.7pct year on year, +0.2pct month on month; net profit margin 14.8%, +11.3pct year on year, +2.2pct month on month.

The Q3 results were in line with forecasts, and revenue in a single quarter reached a record high. Previously, the company predicted that Q3 would achieve revenue of 66.5 to 6.9 billion yuan and a net profit of 9.0 to 1.1 billion yuan. Actual results were above the median forecast. The 24Q2 company achieved revenue of 6.45 billion yuan in a single quarter, surpassing the previous high of 6.24 billion yuan (21Q2) to a record high. 24Q3 revenue continued to grow month-on-month, and hit a record high in single-quarter revenue.

Q3 Profitability increased further. Benefiting from the continuous introduction of high-end mobile phone CIS products from downstream customers and the continued growth of intelligent automotive products, the company's revenue and profitability continued to improve. 24Q3 net profit maintained month-on-month growth, with a net margin of 14.8%, +11.3 pct year over year, and +2.2 pct month-on-month.

Alpha growth continues to materialize. The company's OV50H is widely used in mainstream high-end smart phone rear camera cameras in China, and is gradually replacing similar products from overseas competitors. The OV50E and OV50D have fully blossomed in applications such as mid-range and low-end primary and secondary cameras, telephoto, etc., and the share of the automotive CIS market continues to increase, and more new vehicle specification products contribute revenue one after another. Revenue has reached a record high. Product structure+supply chain structure optimization has continued to improve profitability, and α growth continues to be realized.

Investment advice: We expect the company's net profit to be 3.5/4.8/6 billion yuan in 2024-26, corresponding to the PE valuation 39/28/23 times, maintaining a “buy” rating.

Risk warning events: Downstream demand falls short of expectations; new product launches fall short of expectations; risk that the information used in the research report is not updated in a timely manner.