Incident: The company released its 2024 three-quarter report. In the first three quarters, it achieved cumulative revenue of 0.547 billion yuan, +12.62% year on year, realized net profit of 0.026 billion yuan, net profit of -49.27% year on year, minus 0.019 billion yuan in non-net profit, -58.89% year on year, gross profit margin of 27.88%, year-on-year -11.61 pct.
Multiple factors affected profit pressure: The 3Q2024 company achieved revenue of 0.214 billion yuan in a single quarter, +8.61% /month-on-month +12.74%, and realized net profit of 0.012 billion yuan, -51.13%/month-on-month +10.34%, after deducting non-net profit of 0.005 billion yuan, -72.30% /month-on-month -51.75%, gross profit margin of 28.26%, year-on-year -7.79pct/month-on-month +1.16pct. The company's profitability is under pressure, mainly due to: 1) interest on the 0.48 billion yuan convertible bond issued in June 2023 is accrued at the actual interest rate, and financial expenses increased; 2) the conversion of the IPO fund-raising project began to depreciate, and expenses increased; 3) competition for new energy vehicles was intense, and gross margin declined; 4) increasing direct investment in R&D projects and introducing outstanding R&D technical personnel, and the increase in R&D investment. The company's gross margin increased sequentially in a single quarter, and profitability recovered. We judge that delivery of high-margin products has increased.
There is broad scope for development in various downstream fields: New energy vehicles: New energy control box products use Y series HVDC contactors with 800-1000V DC voltage rating recently developed by the company, which have achieved first-mover advantages of cost reduction, miniaturization, and weight reduction, and have been highly recognized by customers and are being continuously delivered. Aerospace:
The company's high-performance, high-reliability special business control box products will begin mass delivery in June 2024.
Semiconductors: The company continues to develop high-performance refined vacuum capacitors and supporting motor drive and control systems. The products are delivered in batches, and have been recognized by high-end customers in the domestic semiconductor industry. Active devices: The company won the bid for the CSNS-II superconducting ellipsoidal cavity and diffuse beam chamber 648 MHz speed control tube procurement project of the Institute of High Energy Physics of the Chinese Academy of Sciences (second time). The winning bid price was 56,577,100 yuan, demonstrating the company's strong underground vacuum technology strength.
Investment advice: The company's performance is under pressure, and the trend in various downstream fields is improving. We expect the company's 2024-2026 net profit to be 0.048/0.166/0.251 billion yuan, EPS 0.50/1.73/2.61 yuan, and the corresponding PE is 87.56/25.25/16.72 times, maintaining the “increase” rating.
Risk warning: risk of falling demand for new energy vehicles; risk of adverse development of downstream application areas; risk of trade friction; risk of R&D projects falling short of expectations.