Incident: On October 29, 2024, the company released a performance report for the first three quarters of 2024. During the reporting period, the company achieved revenue of 4.743 billion yuan, +34.17% year over year; net profit to mother of 0.232 billion yuan, +130.86% year over year; deducted non-net profit of 0.216 billion yuan, +136.07% year over year. Among them, the third quarter achieved revenue of 1.571 billion yuan, +19.82% year over year; net profit to mother 0.058 billion yuan, +70.66% year over year; deducted non-net profit of 0.055 billion yuan, +70.38% year over year.

The bracket business is growing rapidly, and high-speed connector technology is leading. In the first three quarters of 2024, the company's photovoltaic stent business revenue increased significantly. The US stent factory has already been put into operation. As the decline gradually rises, there is room for future cost reduction. The company has established deep cooperative relationships with NexTracker, GCS, FTC Solar, etc., and is expected to fully enjoy the boom in overseas PV brackets. During the reporting period, the company achieved growth in high-speed connectors and automotive connectors. The company's 5G SFP and SFP+ series products with complete independent intellectual property rights have been successfully developed one after another, and have passed various performance tests with key customers. Technology research and development capabilities and lean production levels are in a leading position in the industry.

Gross margin remained stable, and net operating cash flow increased significantly. The company's gross margin for the first three quarters of 2024 was 19.15%, +1.50pct year on year; of these, the gross margin for the third quarter was 19.95%, +1.68pct year on year, and +0.30pct month-on-month, and gross margin remained stable. The total sales, management and financial expenses ratio for the first three quarters of 2024 was 8.49%, +0.57pct year on year; of these, the third quarter was 10.27%, +1.42pct year on year, and +2.42pct month on month. The company's net operating cash flow for the first three quarters of 2024 was 0.418 billion yuan, +0.302 billion yuan year-on-year, with a significant increase in cash flow.

Investment advice: We maintain the company's profit forecast for 2024-2026, and expect the company's net profit to be 0.377/0.507/0.604 billion yuan in 2024-2026, respectively. We are optimistic that the company's PV brackets, high-speed connectors and other businesses will continue to grow rapidly and maintain a “buy” rating.

Risk warning: downstream demand falls short of expectations, industry competition intensifies, overseas policy risks.