Incident Overview

The company released three quarterly reports: revenue of 13.049 billion yuan, yoy +37.92%, net profit to mother of 1.488 billion yuan, yoy +63.86%, net profit after deducting non-return to mother of 1.376 billion yuan, yoy +86.67%, gross profit margin 25.91%, yoy+2.8pct, net profit margin 11.4%, yoy+1.8pct.

24Q3 revenue was 4.728 billion yuan, yoy +37.95%, qoq +8.45%; net profit to mother was 0.501 billion yuan, yoy +15.33% and qoq -17.6%; net profit without return to mother was 0.472 billion yuan, yoy +51.53%, qoq -16.98%. Gross profit margin 25.4%, yoy+1.97pct, qoq-1.71pct, net profit margin 10.59%, yoy-2.09pct, qoq-3.05pct.

Stable results for the third quarter

Q3 The company's revenue increased month-on-month, mainly due to increased settlement of electronic assembly business projects. The company's gross margin declined slightly month-on-month. On the one hand, due to the increase in the scale of the electronic assembly business, its gross margin was low; at the same time, the packaging substrate and PCB business were affected by changes in the product structure, and the gross margin of the business declined month-on-month. In addition, the decline in production capacity at the new packaging board factory in Guangzhou and the increase in raw material prices also had a negative impact on Q3 gross margin.

Datacom + Automobile leads PCB growth, and FCBGA carrier board capabilities are steadily improving the PCB business structure. PCB leaders benefit deeply from AI cycle: 1) In the digital communication field: in the field of wired side communication, thanks to the increase in demand for high-speed switches and optical module products, the share of wired side communication products has increased, the product structure has been further optimized, and profitability has improved; in the data center field, thanks to the increase in demand for products such as AI accelerator cards and the continuous volume of Eagle Stream platform products, the company's data center sector orders have increased significantly year-on-year . 2) Automotive electronics sector: The company continues to focus on seizing growth opportunities in the direction of new energy and ADAS. Demand for targeted projects from new customers introduced earlier was released, and demand for high-end products related to intelligent driving grew steadily, driving the continuous growth trend of orders in the automotive electronics sector.

FCBGA packaging board: After the new plant in Guangzhou was put into operation, the product line capacity was rapidly improved. Products with 16 layers and below now have mass production capacity, and products with 16 layers and above have sample manufacturing capabilities. The sample delivery certification work for various levels of products is progressing in an orderly manner.

Investment advice

Considering the uncertainty of the macro environment, we expect the company's net profit to be 2.088/2.747/3.24 billion yuan for 2024/2025/2026 (previously estimated net profit to mother for 2024/2025/2026 was 2.328/2.804/3.333 billion yuan, respectively. According to the 2024/10/30 closing price, PE is 25.6/19.5/16.5 times, maintaining a “buy” rating.

Risk warning

Raw material price fluctuation risk, trade friction risk, exchange rate fluctuation risk, peripheral environment fluctuation risk.