Incident: On October 28, 2024, the company released the 2024 three-quarter report. In the first three quarters of 2024, the company achieved revenue of 5.395 billion yuan, up 67.11% year on year; net profit to mother 0.557 billion yuan, up 184.46% year on year; net profit after deducting non-return to mother 0.547 billion yuan, up 186.58% year on year. The results are in line with market expectations.

Key points of investment

Various businesses progressed steadily, and Q3 performance continued to increase: in Q3, the company achieved revenue of 1.817 billion yuan, up 30.81% year on year; net profit to mother 0.199 billion yuan, up 140.63% year on year; net profit after deducting non-return to mother 0.193 billion yuan, up 133.11% year on year. This is mainly due to increased market demand, year-on-year increase in revenue from IoT smart terminal products and data storage devices, and increased revenue from the server remanufacturing business.

Downstream sentiment and business adjustments partially affected performance growth: Affected by factors such as fluctuations in market sentiment, adjustments in the company's sales strategy, and business development strategy adjustments, etc., the company's third-quarter business performance was partially impacted: (1) Affected by poor demand in the downstream terminal market, memory chip manufacturers and channel markets experienced a backlog phenomenon, and the company's DDR4 memory chips adopted a necessary sales competition strategy, which led to a narrowing of related business profit margins; (2) The company actively contracted some low-margin ODM smart terminal businesses.

The computing power business is progressing rapidly, opening up new growth space: In June 2024, Matbus, a holding subsidiary of the company, signed a “Cloud Computing Service Framework Agreement” with leading domestic Internet companies, agreeing to provide cloud computing power services for customer A. In October 2024, Aojia Software, a subsidiary indirectly controlled by the company, signed a “procurement framework contract” with Shanghai Yuyun due to planning to build a large-scale computing power service cluster (10,000 card level) with large model training and reasoning capabilities. In October 2024, the company signed a “Strategic Cooperation Framework Agreement” with the Artificial Intelligence Research Institute of the Hefei Comprehensive National Science Center.

Profit forecast and investment rating: Co-Creation Data has a strong shareholder background. In Q3 2024, the company's computing power business was implemented rapidly, and the company's performance is expected to increase in the future. Based on this, we maintain our 2024-2026 net profit forecast of 0.789/1.088/1.436 billion yuan, maintaining a “buy” rating.

Risk warning: The development of the server remanufacturing business falls short of expectations; rising raw material prices; risk of exchange rate fluctuations.