2024Q3 Joyson Electronics achieved revenue of 14.06 billion yuan, +2% month-on-month. The company achieved revenue of 41.135 billion yuan in the first three quarters of 2024, or -0.42% year-on-year. Among them, automobile safety business revenue was about 28.4 billion yuan, automotive electronics revenue was about 12.7 billion yuan, and net profit to mother was 0.941 billion yuan, +20.90% year-on-year.

On a quarterly basis, the company achieved revenue of 14.056 billion yuan in 2024Q3, -1.68% year-on-year, +1.85% month-on-month, and net profit of 0.305 billion yuan to mother, +0.50% year-on-year and -7.73% month-on-month. In the first three quarters of 2024, the company's net profit to mother increased 21% year-on-year. The reason is that various cost reduction and efficiency measures promoted by the company in recent years have achieved remarkable results, costs have continued to be optimized, and income tax expenses have increased due to the continuous recovery of overseas business profitability.

2024Q3 gross margin increased 0.8 pct year over year, and net margin increased 0.4 pct year over year. In the first three quarters of 2024, the company's gross profit margin was 15.6%, +1.7 pct year on year, net profit margin 3.1%, and +1.0 pct year on year. In 2024Q3, the company's gross profit margin was 15.7%, +0.8pct year on year, +0.2pct month-on-month, net profit margin 3.0%, +0.4pct yoy, -0.3pct month-on-month. In the first three quarters of 2024, the gross margin of the company's automobile safety business increased 2.6 pct year on year to about 14.0%. As the European and American regional business continued to improve, the car safety business performance increased sequentially for several consecutive quarters. All four major business regions around the world have achieved profits, and the performance growth is remarkable. The gross margin of the automotive electronics business remained stable at around 19.2% in the first three quarters.

The company has plenty of orders in hand and continues to optimize the order structure. In the first three quarters of 2024, the total lifetime value of new global orders was about 70.4 billion yuan, of which orders related to new energy models were about 37.6 billion yuan. By business segment, the automotive safety business received a total order amount of about 49.1 billion yuan, and the automotive electronics business received a total order amount of about 21.4 billion yuan. By market, the Chinese market, in particular, the business of independent brands/new forces continues to grow. The amount of new domestic orders received is about 31 billion yuan, accounting for about 44%.

Accelerate the development of the automotive electronics business. The company's business categories continued to expand. In the first three quarters, in the fields of intelligent driving, smart cockpit/connectivity, and intelligent body area, the company acquired new emerging businesses such as UWB technology services (digital keys, cockpit live detection, etc.), ADAS L2 Smart Camera (front-view all-in-one) business, and vehicle-road cloud integration business.

Risk warning: Vehicle sales fall short of expectations, and raw material prices fluctuate.

Investment advice: Lower the profit forecast and maintain a rating superior to the market. Considering the decline in global automobile production, we lowered our profit forecast. We expect the company's 2024-2026 revenue to be 56.843/60.528/65.212 billion yuan (the original 24/25/26 forecast was 61.386/65.487/69.483 billion yuan), and net profit to mother is 1.31/1.582/1.92 billion yuan (the original 24/25/26 forecast was 1.366/1.661/2.001 billion yuan) The corresponding PE is 19/16/13 times, maintaining an superior market rating.