Chunqiu Electronics released its report for the third quarter of 2024: in the first three quarters of 2024, the company achieved operating income of 2.982 billion yuan, a year-on-year increase of 27.73%; realized net profit attributable to shareholders of listed companies of 0.141 billion yuan, an increase of 1268.19% year on year; realized net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss of 0.036 billion yuan, an increase of 471.39% year on year.

Key points of investment

Steady growth in operating revenue, AIPC drives demand for structural components

In the first three quarters of 2024, the company achieved revenue of 2.982 billion yuan, a year-on-year increase of 27.73%; of these, Q3 achieved revenue of 1.105 billion yuan, a year-on-year increase of 20.40%, and net profit to mother of 0.114 billion yuan, an increase of 346.19% over the previous year. Thanks to the gradual recovery of the industry, shipments increased year on year. According to TechInsights statistics, in the first quarter of 2024, global laptop shipments increased 7% year over year to 46.1 million units, and the laptop recovery trend is gradually becoming clear. AIPC's accelerated penetration also continues to drive demand for structural components. Promote the steady growth of the company's revenue and a rapid recovery in profitability.

The recovery of notebook computers combined with AIPC accelerated penetration. The company used “two wings in one” as its strategic guide to increase the company's production capacity and order delivery volume for magnesium alloy applications in new energy vehicles, using the recovery trend of notebook computers and switching demand brought about by AIPC's increased penetration rate, and steadily improved the company's performance.

In terms of product system, the company has a comprehensive structural component module product line, covering the back cover, front frame, top cover and bottom cover of laptop computers. The manufacturing process includes molding, painting, stamping, CNC, anode, full milling, in-mold transfer, etc.; in terms of technology, the company is one of the few notebook structural parts suppliers with independent mold design and production capabilities, and the mold development accuracy can reach 0.008-0.015mm; on the customer side, the company maintains long-term stable relationships with customers such as Lenovo, Samsung Electronics, HP, and LG.

The lightweight magnesium alloy for new energy vehicles to build the company's second-largest lightweight upgrade for new energy vehicles is also in full swing. In the first half of 2024, sales of new energy passenger vehicles in China reached 7.17 million units, an increase of 21% over the previous year. In terms of the application of magnesium alloy materials for new energy vehicles, the company has advanced semi-solid injection molding technology, and also has large-scale semi-solid equipment for vehicles. The company's business in the field of automotive electronics is progressing steadily. The company's business in the field of automotive electronics is progressing steadily, and production capacity is gradually being released. The company has been certified by many well-known automotive electronics manufacturers and their suppliers. The downstream products include Xiaomi, NIO, Xiaopeng, BYD, BMW, and Geely. Waiting for car companies.

Profit forecasting

The company's revenue for 2024-2026 is estimated to be 3.992, 5.137, 6.082 billion yuan, EPS 0.34, 0.59, and 0.79 yuan, respectively. The current stock price corresponds to PE of 38, 22, and 17 times, respectively. With the recovery of PCs, the penetration of AIPC, and the upgrading of lightweight vehicles, the company will benefit from a continuous increase in revenue and profit and maintain a “buy” investment rating.

Risk warning

Macroeconomic risks, risk of product development falling short of expectations, risk of increased industry competition, risk of downstream demand falling short of expectations.