The company announced its 2024 three-quarter report. In the first three quarters of 2024, the company achieved revenue of 1.07 billion yuan, up 18.41% year on year, achieved net profit of 0.103 billion yuan, up 23.05% year on year, and realized net profit after deducting 0.092 billion yuan, up 35.82% year on year. Looking at a single quarter, the company achieved revenue of 0.476 billion yuan in the third quarter of 2024, an increase of 41.02% year on year, and achieved net profit to mother 0.049 billion yuan, up 38.99% year on year, achieving net profit without deduction of 0.039 billion yuan, an increase of 49.58% year on year. As a leading domestic MOPA laser company, the company has continued to expand the application of intelligent laser devices in the fields of photovoltaics, consumer electronics, etc. In the future, as downstream demand gradually improves, it is expected to open up room for growth and continue to maintain the purchase rating.

Key points to support ratings

Benefiting from the recovery in demand in the consumer electronics industry, the company's performance has been growing steadily. In the first three quarters of 2024, the company achieved revenue of 1.07 billion yuan, a year-on-year increase of 18.41%, and net profit of 0.103 billion yuan, a year-on-year increase of 23.05%. Performance growth was steady, mainly due to the gradual recovery in demand in the consumer electronics industry and an increase in the company's camera module photoelectric active inspection business revenue. At the same time, the laser business maintained steady growth, making a steady contribution to profit growth.

Profitability is maintained at a high level, and expense rates are well controlled. In terms of profitability, the company's overall gross margin for the first three quarters of 2024 was 40.20%, up 0.75 pct year on year, maintaining a high level. The net interest rate was 9.12%, down 0.12 pct year on year, mainly due to the calculated impairment value of about 41.7955 million yuan in the third quarter, compared to only 18.5815 million yuan in the same period last year. In terms of cost ratios, the company's sales/management/ R&D/ finance rate for the first three quarters was 6.99%/8.16%/11.69%/-0.51%, respectively, -0.54 pct/-0.02pct/-0.16pct. The overall cost rate for the period was 26.33%, down 0.93 pct year on year, reflecting the company's good cost control capabilities.

Continuously expanding applications in new fields, photovoltaics and consumer electronics provide growth impetus. As a leading domestic MOPA laser company, the company continues to explore the application of lasers in various fields. In the photovoltaic field, for photovoltaic perovskite, the company can provide laser intelligent equipment for high-precision marking of thin-film batteries. By the end of the third quarter, the company had received orders from many customers, and delivery and acceptance work continued to advance, while actively cooperating with customers to land in GW grade production lines. In the consumer electronics sector, after entering the mobile camera module inspection supply chain for leading consumer electronics customers in 2023, the company's camera module testing orders have grown rapidly, and the company has continued to deliver equipment for multiple camera core functions. Currently, the company is fully equipped to test multiple camera core functions. Covering all camera module testing projects and actively undertaking equipment requirements for module inspection automation, it is expected that the company will continue to grow in performance over the next two years.

valuations

Considering the slowdown in demand for production expansion in the company's downstream new energy sector such as lithium batteries, we lowered the company's profit forecast for 2024-2025 and added a profit forecast for 2026. We expect to achieve operating income of 1.419/1.796/2.131 billion yuan in 2024-2026, and achieve net profit of 0.149/0.213/0.259 billion yuan, corresponding PE of 31.8/22.3/18.3 times, maintaining the purchase rating.

The main risks faced by ratings

Downstream demand falls short of expectations; the risk of a sharp rise in raw material prices; the risk of new product promotion falling short of expectations; the risk of increased competition.