Incident: The company released its 2024 three-quarter report. In the first three quarters, it achieved cumulative revenue of 1.057 billion yuan, +29.99% year on year, realized net profit of 0.159 billion yuan, +24.22% year on year, after deducting non-net profit of 0.128 billion yuan, +49.01% year on year, gross profit margin of 31.55%, and +2.75pct year on year.

Single-quarter results resumed a good growth trend: 3Q2024 single-quarter revenue of 0.412 billion yuan, +33.07% month-on-month +23.92%, realized net profit of 0.065 billion yuan, +17.88% /month-on-month +69.90%, net non-net profit 0.056 billion yuan, +47.90% y/month-on-month +96.75%, gross profit margin of 32.06%, year-on-year +2.02pct/month-on-month +2.34pct. The company's revenue growth has accelerated, and profits have resumed double-digit growth. We judge that the contribution of automotive electronics is the main factor. There is also a positive trend in demand from major customers in the fields of micro transmission modules, consumption, medical care, etc.; there has also been a significant year-on-month decline in R&D rates, helping to release profits.

Focus on the company's growth space for horizontal downstream application expansion+vertical layout: Automotive electronics: The company has a deep foundation of cooperation with major automotive industry customers such as Bosch, BYD, and Great Wall. At the same time, the company continues to increase its overseas market layout to meet the trend of car companies going overseas. In the short to medium term, automobiles are still the main driving force for the company's growth. Motors: Completed the development of high-torque DC motors, brushless DC motors, miniature brushless hollow cup motors, and permanent magnet stepper motors. Among them, high-torque DC motors and brushless hollow cup motors have all formed a series of products, successfully used in automotive, medical, humanoid robots, etc., and are being developed to break through foreign technical barriers; 8mm permanent magnet stepper motors have achieved automated mass production, and are also actively laying out 3.4mm and 4.4mm more challenging products. Robotics: The company develops bionic robot dexterous hand products to help the development of the robot industry.

Investment advice: The company's performance trend is good, and the horizontal and vertical layout broadens the room for growth. We expect the company's net profit to be 0.221/0.28/0.387 billion yuan in 2024-2026, EPS is 0.92/1.17/1.61 yuan, and the corresponding PE is 50.32/39.66/28.68 times, maintaining the “increase” rating.

Risk warning: risk of demand development in emerging industries falling short of expectations; risk of falling consumer electronics demand; risk of rising raw material prices.