Incident Overview

The company released its quarterly report for the first three quarters of '24. The company achieved revenue of 5.381 billion yuan, yoy +31.05%, net profit due to mother of 1.603 billion yuan, yoy +40.38%, net profit after deducting 1.437 billion yuan, yoy +63.66%; gross profit margin 42.77%, yoy+2.99pct, net profit margin 29.8%, yoy+1.95pct.

24Q3 company revenue 1.953 billion yuan, yoy +32.29%, qoq +4.81%, net profit to mother 0.578 billion yuan, yoy +40.59%, qoq -2.5%, net profit of 0.524 billion yuan, yoy +69.56%, qoq -2.22%, gross profit margin 44.3%, yoy+4.42pct, qoq+0.93pct, net profit margin 29.55%, yoy+1.68pct, qoq- 2.25pct

The two main businesses are progressing smoothly, and profitability has increased significantly

In the third quarter, when overall demand was weak, the company's gross revenue and margin both achieved year-on-month growth, highlighting the company's own alpha, while net profit to the mother declined slightly month-on-month due to the cost side. The company's R&D expenses/financial expenses increased 0.01/0.052 billion yuan month-on-month in Q3.

Continuously improve product capabilities and continue to break through the MLCC business

The company takes “material+structure+function” as its development direction. The company's production and sales of products such as ceramic inserts for optical communications, alumina ceramic substrates for chip resistors, and semiconductor ceramic packaging bases are among the highest in the world. Among them, optical fiber ceramic inserts and chip resistor ceramic substrates are rated as “single champion” products by the Ministry of Industry and Information Technology.

In the field of the core single product MLCC, the company has formed a rich product matrix, which is widely used in mobile communications, smart terminals, new energy and other industries. The company achieved technological breakthroughs and complete mass production of dielectric layers with a thickness of 1 micron. The number of stacked layers reached more than 1000, and the products covered mainstream specifications from 0201 to 2220 sizes. With product technology breakthroughs and quality improvements, the company's ultra-high capacity MLCC products won the 12th China Electronic Information Fair Innovation Gold Award, and the market recognition of the company's MLCC products increased significantly.

Investment advice

Considering the uncertainty in the macro environment, we expect the company's net profit to be 2.148/2.736/3.184 billion yuan for 2024/2025/2026 (previously estimated net profit to mother was 2.373/2.859/3.317 billion yuan for 2024/2025/2026). According to the 2024/10/30 closing price, PE is 33.4/26.2/22.5 times, maintaining a “buy” rating.

Risk warning

The new production capacity falls short of expectations, downstream demand falls short of expectations, the risk of not raising sufficient funds for project construction in a timely manner, the risk of untimely updating of research information, and the risk of fluctuations in the surrounding environment.