The company released its 2024 three-quarter report

The 24Q3 company achieved revenue of 4.91 billion yuan, +10.5% year over year; net profit due to mother 0.62 billion yuan, +11.4% year over year; net profit after deducting non-return to mother 0.61 billion yuan, +13.7% year over year.

24Q1-3 achieved revenue of 12.26 billion yuan, +13.4% year on year; net profit of 1.11 billion yuan, +13.1% year on year; net profit without return to mother of 1.13 billion yuan, +9.0% year on year; 24Q3 gross profit margin 27.6%, down 0.5 pct, net profit to mother 13%, up 0.1 pct; the company's revenue growth and profitability remained steady, and revenue and profit reached a record high in the single quarter!

Deepen the global layout and steadily advance the internationalization strategy

As of 24H1, the company has more than 50 production bases and 5 service centers in 10 countries and more than 40 cities around the world. Its global manufacturing advantages and global delivery layout can significantly shorten the production and transportation time of products, help the company respond quickly to global market needs, ensure stable service to customers, and lay a solid foundation for the company's continuous and steady development. The company opened its Philippine factory on July 22, 2024, and its Mexican factory on September 26, further improving the global production base layout. The international strategic layout is progressing steadily, and we expect it to help avoid tariff risks.

Accelerate the development of new quality productivity

The company's intelligent process continues to advance: Xuchang Yutong has been selected as the “2023 Intelligent Manufacturing Demonstration Factory” by the Ministry of Industry and Information; smart factories in Suzhou, Hunan, Chengdu, and Jiujiang Yutong have been fully put into operation; Vietnam, Longgang Yutong smart warehouses have been completed, and phase II is under construction; smart factories such as Guizhou, Jiangsu, Dongguan, Shenzhen, and Yujin, Kunshan are under construction; and smart factories are being planned and prepared for Luzhou, Chongqing, Yantai, Haikou, etc. We expect that with the implementation of smart factories in various regions, there is still room for further improvement in the company's lean production and manufacturing capabilities, and the cost ratio is expected to continue to be optimized.

Normalize dividends+repurchases, and focus on investor returns

Since its listing, the company has implemented a cash dividend of 2.85 billion yuan and a repurchase of 0.65 billion yuan, with a total dividend+repurchase of 3.5 billion yuan. The company plans to repurchase 0.1-0.2 billion yuan in 2024, and has repurchased about 29.107 million yuan as of September 30; in addition, the company's 23-25 plan to distribute profits in cash each year is not less than 60% of the parent company's net profit in the consolidated statement achieved in that year, and normalized dividends+repurchases enhance value growth.

Adjust profit forecasts to maintain “buy” ratings

Based on the 24Q3 performance situation, considering that the consumer environment is still weak in the second half of the year, we adjusted our profit forecast. We expect net profit to be 1.63/1.88/2.16 billion yuan for 24-26 (previous value was 1.7/1.98/2.28 billion yuan), and the corresponding PE was 15/13/11X, respectively, to maintain a “buy” rating.

Risk warning: consumer electronics demand falls short of expectations, diversified business development falls short of expectations, risk of fluctuations in raw material prices, risk of exchange rate fluctuations