The company's 2024Q3 revenue increased both year on month, with impressive performance. Maintaining the “buy” rating, the company released the 2024 three-quarter report. 2024Q1-Q3 achieved operating income of 7.698 billion yuan, +34.02% year over year; net profit to mother of 0.765 billion yuan, +30.54% year on year; deducted non-net profit of 0.778 billion yuan, +33.20% year on year; gross profit margin of 21.55%, -0.48pcts year on year, net profit margin 9.93%, YoY- 0.26pcts Among them, 2024Q3 achieved revenue of 2.842 billion yuan, +37.07% YoY, +15.36%; net profit to mother 0.306 billion yuan, +26.70% YoY, +22.52% month-on-month; after deducting non-net profit of 0.316 billion yuan, +36.54% YoY, +23.98% month-on-month; gross profit margin 23.17%, YoY -0.77pcts, +1.48pcts month-on-month. The company accelerates the deployment of AI-related products and is expected to fully benefit from AI terminal application demand. We maintain our 2024-2026 profit forecast. We expect net profit to be 1.175/1.492/1.932 billion yuan for 2024-2026, corresponding EPS is 1.36/1.73/2.24 yuan, and the current stock price is 33.7/26.5/20.5 times, maintaining a “buy” rating.

The plan to repurchase shares is used as an incentive for employees to hold shares or share shares, demonstrating the company's development confidence. According to the announcement on September 14, 2024, the company plans to use its own funds to repurchase part of the publicly issued shares. The total repurchase capital is within the range of 70 million yuan to 140 million yuan (all shares included); the repurchase price does not exceed 47.59 yuan/share, about 1,470,898 shares to 2,941,794 shares, accounting for 0.17% to 0.34% of the company's total issued share capital. This repurchase reflects management's affirmation of the company's intrinsic value and firm confidence in future sustainable development. It is conducive to enhancing public investor confidence, and all of the repurchased shares will be used to implement the company's employee shareholding plans or equity incentives, which will fully motivate the company's employees and promote the long-term development of the company.

Accelerate the overseas strategic layout, plan to build a new Vietnamese production base and complete the acquisition of overseas companies. According to the announcement on September 30, 2024, the board of directors of the company agreed to invest in the construction of a high-precision printed circuit board project in Vietnam through its wholly-owned subsidiary VICTORY GIANTTECHNOLOGY (SINGAPORE) to produce high-multi-layer printed circuit boards and HDI. The planned investment amount is no more than 0.26 billion US dollars, including but not limited to setting up a new company, purchasing land, new plants and engineering construction, and purchasing production equipment and supporting equipment matters. On the same day, the company completed the acquisition of APCB Electronics Thailand. Through its wholly-owned subsidiary Singapore Shenghong and PSL holding 100% of the shares in the target company, the overseas strategic layout is progressing smoothly.

Risk warning: The recovery in industry sentiment falls short of expectations, product development falls short of expectations, and the competitive landscape of the industry intensifies.