Key points of investment

Incident: The company released its 2014 three-quarter report. 24Q1-3 revenue was 1.53 billion yuan, up 58%; net profit to mother was 0.149 billion yuan, -17% year over year; gross profit margin was 32.6%, -8.4 pct year on year. Among them, 24Q3 revenue was 0.63 billion yuan, +104%/+35% month-on-month; net profit to mother was 0.062 billion yuan, +33%/29% month-on-month, gross profit margin 28.3%, and -11.7/-7.1 pct month-on-month, mainly due to an increase in the share of low gross margin commercial and commercial reserves. The results slightly exceeded market expectations.

Slight reverse shipments remained flat month-on-month, and industrial and commercial reserves concentrated delivery volumes. The 24Q3 company's slight reverse shipments were about 0.26 million units, and gross margin remained stable; looking at the subregion, the company was still dominated by Europe and the US, with Europe accounting for about 60%. Centralized delivery of Q3 commercial and commercial savings projects boosted the company's performance improvement, achieving revenue of about 0.26 billion yuan, an increase of 150% +, and gross margin of about 15%, which basically remained stable. Looking ahead to Q4, we expect slight reverse shipments to remain flat month-on-month. We expect shipments of 1-1.1 million units for the whole year, an increase of 20% +, and a slight decrease in Q4 deliveries from the Industrial and Commercial Reserve. We expect to achieve revenue of 0.5-0.6 billion yuan for the whole year, doubling the year-on-year increase.

Rates declined during this period, and inventories were gradually digested. The 24Q3 company's expense ratio was 10.9%, -13.7/8.3 pct, inventory at the end of 24Q3 was 1.27 billion yuan, down 19% from the beginning of '24; contract debt at the end of 24Q3 was 0.055 billion yuan, up 214% from the beginning of '24; 24Q3 net cash flow from operating activities was 0.38 billion yuan, an increase of 0.55 billion yuan over the same period last year.

Profit forecast and investment rating: Considering the slight slowdown in inverse demand, we slightly lowered the company's profit forecast. The company's net profit for 2024-2026 is 0.226/0.301/0.394 billion yuan (previous value was 0.25/0.34/0.46 billion yuan), an increase of 3%/33%/31%. The corresponding PE is 39/29/23, maintaining the “gain” rating.

Risk warning: industry competition intensifies, policies fall short of expectations