The company announced its quarterly report for 2014, achieving revenue of 12.1 billion +23.6% year over year, net profit of 0.59 billion to mother +38159.1% year over year, and 0.37 billion before deducting 0.37 billion not to mother, a loss of 0.076 billion in the same period last year. Our review is as follows:
Q3 results were in line with expectations, and revenue hit a record high in a single quarter. Looking at Q3 alone, revenue 4.41 billion +13.5% month-on-month +17.4%, net profit to mother 0.16 billion +20.6% month-on-month, +29.6% month-on-month, minus 0.15 billion year-on-year +68.0% month-on-month, gross profit margin 20.0% y-1.5pcts month-on-month +1.8pcts, net profit ratio 4.0% yoy +0.1pcts month-on-month, +0.3pcts month-on-month, period expense ratio 14.0% yoy -1.8pcts. Q3 revenue reached a record high, mainly due to entering the traditional peak season of Q3. The continuous improvement in the company's order demand led to an increase in the operating rate. Among them, the Android business production capacity was tight. At the same time, the introduction of new material models for customer A brought new volume, and the operating rate of the new energy business maintained an upward trend. Combined with the decline in the cost side, it led to a month-on-month improvement in Q3's profitability.
Looking ahead to 24Q4 and 25, the improvement of the consumer electronics and new energy business and optimization of management capabilities are expected to drive the company to release profit flexibility. In the short term, the company's Q4 order demand is expected to maintain a good trend. Revenue is expected to increase month-on-month, compounded by factors such as declining costs and increased efficiency in the new energy business. It is expected that overall profitability will continue to improve quarterly. Looking at the consumer electronics business throughout the year, the company continues to “increase share+expand the category”, hoping to drive new volume. Android titanium alloy cases continue to be released, and domestic Android customer demand is gradually picking up; in the new energy business, orders for structural parts from key leading manufacturers in the industry such as T customers and C customers continue to be introduced, and production capacity utilization continues to increase. Looking at 25 years, new projects such as Mac and AI Phone for customer A are expected to bring in new volume. At the same time, the new energy business is expected to continue to improve. The company's strict control of internal quality and efficiency and costs is expected to reap results, bringing flexible space for profit growth.
Maintain an “overweight” investment rating. In the medium to long term, the company's A customer structural parts and small parts business continues to provide growth momentum. The titanium alloy trend drives demand from non-A customers, and the continuous release of orders from core customers in the new energy business drives an increase in operating rate, opening up room for the company's long-term growth. We forecast revenue of 16.47/19.27/22.16 billion for 24-26 and net profit of 0.77/0.94/1.27 billion, corresponding to current share price PE of 27.6/22.6/16.6 times, maintaining an “incremental” investment rating.
Risk warning: Industry demand falls short of expectations, competition among peers intensifies, raw material prices fluctuate, and capacity utilization falls short of expectations.
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