The company released three quarterly reports: Q3 achieved revenue of 1.53 billion yuan (yoy +24.15%, qoq +15.48%) and net profit of 0.235 billion yuan (yoy +30.77%, qoq +54.09%). Q1-Q3 2024 achieved revenue of 4.273 billion yuan (yoy +33.79%) and net profit to mother of 0.607 billion yuan (yoy +33.24%).

The company's third-quarter results exceeded our expectations in the performance outlook report (we expect net profit of 0.205-0.225 billion yuan for Q3). Q2 The company's short-term performance is under pressure due to issues such as the pace of customer revenue recognition. Q3 once again showed strong growth momentum. Looking forward to the future, the company is iterating products in line with changes in the EE structure, while continuing to develop products to leading domestic and international customers. We maintain a “buy” rating.

Some compensation revenue was added up in Q3, and the company's Q3 revenue increased by 1.53 billion yuan (qoq +15.48%) month-on-month, mainly due to: ① partial compensation revenue deferred from the previous period was received one after another in Q3; ② Among major customers, ideal Q3 production was +62% month-on-month to 0.154 million vehicles, and Tesla Q3 production was +31% month-on-month to 0.251 million vehicles, but Volkswagen's production under pressure declined month-on-month.

③ Q3 revenue for lighting control, motor control, vehicle appliances and electronics, and energy management systems was +17.2%/+12.1%/+5.6%/+48.5% to 7.6, 0.23, 0.21, and 0.25 billion yuan, respectively.

The overall profitability of Q3 improved compared to the first half of the year. The cost ratio narrowed significantly, and the gross profit margin of Q3 was 29.65%, exceeding the overall 24H1 ratio of 29.14%. It was mainly due to the receipt of compensation revenue and a further increase in gross margin of the energy management system in Q3. The Q3 net profit margin was 15.88%, an improvement over 24H1's overall 14.39%, mainly due to the narrowing of the cost ratio. The Q3 sales, management, R&D, and finance rate was 12.34%, -3.72/-2.45pct, respectively, but the Q3 sales expense ratio was 2.36%, +0.82pct/+1.48pct compared to the same period, mainly due to the increase in related expenses due to the targeting of new projects. The Q3 credit impairment loss of 19.06 million increased from Q2's loss of 1.41 million. The main reason was that Q3 accounts receivable increased by 0.162 billion yuan to 1.665 billion yuan compared to Q2, increasing accrued losses.

It once again emphasizes Keboda's core competitiveness. In line with changes in the EE architecture, product iteration and international development. In the context of vehicle E/E architecture iteration, the company has the ability to upgrade and iterate products around vehicle “control”. The value of bicycles has increased from a few hundred yuan during the original lighting control and motor control period to nearly 10,000 yuan of current multi-category domain control; working simultaneously at home and abroad. The new domain control products have experienced the exercise of new forces such as Ideal and NIO. The company has gained the hard power of innovative research and development to develop more domestic customers and globally Expanding the range of profitable customers, the company is doing Follow this long-term winning development path.

Profit forecasting and valuation

We maintain our original profit forecast and expect net profit to mother of 0.85/1.17/1.5 billion yuan in 2024-2026, +40%/37%/28% YoY. The company's 1-year/3-year PE-TTM valuation quantiles were 27%/9%, respectively, at the bottom. Comparable to the company's 25-year iFind unanimously expected an average PE value of 29.9 times. Referring to comparable companies, we gave the company a 25-year 29.9X PE target, with a target price of 86.49 yuan (previous value of 61.60 yuan).

Risk warning: Production and sales in the downstream automotive industry fall short of expectations; development of new projects falls short of expectations.