Brief performance review

On October 30, 2024, the company released the 2024 three-quarter report results:

1) In the first three quarters of 2024, the company achieved revenue of 0.203 billion yuan, a year-on-year decrease of 7.58%; the company achieved net profit attributable to mother - -0.063 billion yuan; and the company achieved net profit deducted from non-mother - -0.103 billion yuan.

2) In the third quarter of a single quarter, the company achieved revenue of 0.075 billion yuan, a year-on-year decrease of 2.40%; realized net profit to mother of -0.021 billion yuan; realized net profit deducted from non-mother -0.03 billion yuan. Operating analysis

The company's revenue is under pressure, waiting for downstream demand to improve: the company achieved revenue of 0.203 billion yuan in the first three quarters of 24, a year-on-year decline of 7.58%, mainly due to intense competition in the laser market and a further decline in the price of products such as optical fiber coupling modules in the industrial market.

The company's consolidated gross profit margin for the third quarter of '24 was 28.98%, +2.18pct. The company's downstream laser market is recovering slowly, the downstream market growth has entered a period of relative stability, and the company's revenue is under pressure. The company continues to develop products. As a leading company that has been deeply involved in high-power laser semiconductors for many years, it will continue to increase the domestic substitution process and simultaneously promote the development of domestic and overseas markets.

Investment in R&D continues to be increased, and new products in various segments continue to expand: in the first three quarters of 2024, the company spent 0.094 billion yuan on R&D, accounting for about 46.50% of revenue. Judging from research and development progress in segmented fields: 1) High-power semiconductor laser chips remain in the lead. The company's 9xxNM50W high-power semiconductor laser chip has been mass-produced and shipped, and is currently the semiconductor laser chip with the highest mass-produced power on the market. 2) VCSEL applications continue to expand, and currently cover three major application scenarios for consumer electronics, optical communications, and automotive lidar chips. 3) Develop the market for optical communication products. The company launched single-wave 100G EML chips, 50G VCSEL chips, and 100mW CW DFB chips. These products are the core components of current 400G/800G/1.6T high-speed optical modules. 4) Pioneering laser wireless energy transmission chips. The company's research team released the latest results of all-semiconductor laser wireless energy transmission chips and systems, including transmitter end laser chips and modules, receiver single/multi-junction laser battery chips and modules, and laser wireless energy transmission systems.

Profit Forecasts, Valuations, and Ratings

The company's net profit for 2024-2026 is expected to be -0.031 billion yuan, 0.033 billion yuan, 0.08 billion yuan, corresponding EPS of -0.17 yuan, 0.19 yuan, and 0.48 yuan, maintaining the “buy” rating risk alert

Downstream demand falls short of expectations; market competition intensifies; product iterations fall short of expectations.