Incident: The company released its three-quarter report for 2024, with revenue of 3.169 billion yuan, up 13.01% year on year; net profit to mother was 0.11 billion yuan, up 30.15% year on year.

Expenses are properly controlled. In the third quarter of 2024, the company's revenue was 1.083 billion yuan, up 10.20% year on year; net profit to mother was 0.036 billion yuan, up 54.41% year on year, and the growth rate increased month-on-month compared to the first half of the year. In the first three quarters of 2024, the company's gross profit margin was 19.53%, down 2.84 percentage points from the same period last year; the net profit margin was 3.47%, up 0.46 percentage points from the same period last year.

The automotive industry goes one step further. On October 18, 2024, the company and relevant officials of FAW of China had in-depth communication on the “China FAW Greater Bay Area R&D Institute Talent Innovation Service Cooperation” and reached a preliminary cooperation agreement. The company has previously announced cooperation with a number of domestic car companies, marking the company's further development in the automotive industry.

The Native Hongmeng App Conference was held. On October 22, 2024, native Hongmeng HarmonyNext was officially released. On October 16, 2024, the company hosted the Hongmeng Native Application Cooperation and Exchange Conference. The company announced the French “Xingyao Plan” at the conference. The plan aims to further expand new areas of Hongmeng's business, enhance the technical level and market competitiveness of Hongmeng applications, and help partners in all industries successfully embark on the path of Hongmeng transformation. The company and a number of well-known enterprises announced that they have signed ecological strategic partnership agreements to jointly promote the prosperity and development of Hongmeng ecology.

Investment advice: The company's revenue is growing steadily, and the revenue of some industries is growing rapidly, and it has entered the Huawei Hongmeng system. The company's EPS is expected to be 0.44\ 0.82\ 1.25 yuan in 2024-2026, respectively, maintaining a “buy” rating.

Risk Warning: New business areas fall short of expectations; industry competition intensifies