The company's traditional basic panel business is liquid crystal display modules and optical camera modules. The second growth curve is the semiconductor advanced packaging and testing business.

1. The main business continues to improve, and the operating data is improving comprehensively

Revenue for the 1st to 3rd quarter: 6.962 billion yuan, +15% year over year; net profit to mother: 0.072 billion yuan, +308% year over year. Q3 revenue per quarter: 2.627 billion yuan, +11% YoY, +29% month-on-month; net profit to mother: 0.055 billion yuan, +631% YoY, +421% month-on-month.

2. A large percentage of repurchases shows the company's confidence

On October 31, the company announced that the chairman proposed that the company repurchase shares through self-financing, etc. Total share repurchase capital: not less than 0.25 billion yuan, not more than 0.4 billion yuan. The repurchase of shares is intended to be used to implement equity incentives or employee stock ownership plans. Based on the closing price on October 31, the repurchase amount accounts for 6.25% to 10% of the company's current market value.

3. Advanced sealing and testing business can be expected in the future

The first phase of advanced packaging testing is the packaging test for 12-inch display driver chips. Currently, production capacity is climbing smoothly. It is initially expected to enter the top four in the 12-inch display driver chip packaging and testing industry in mainland China. We expect the advanced sealing and testing business to be on the right track next year. Driven by the demand for autonomy, the market space will grow rapidly.

Investment advice:

We believe that there are obvious signs of recovery in the company's main business, rapid growth in profit side performance, good demand for the company's modules, and maintaining a positive trend.

The company's sealing and testing business is the second curve of business growth. As production capacity climbs and market development, it is expected to achieve better performance in the future.

Due to the slowdown in the pace of recovery in consumer electronics demand, we lowered our 2024-2025 revenue forecast of 116.56/13.092 billion yuan to 9.758/11.141 billion yuan, estimated revenue for 26 to 12.031 billion yuan, and lowered the 2024-2025 EPS forecast of 0.64/0.96 yuan to 0.34/0.94 yuan. The estimated EPS for 26 is 1.15 yuan, and the closing price on November 13, 2024 is 17.12 yuan, corresponding PE is 50.75/18.14/14.85 times. Maintain the company's “gain” rating.

Risk warning: Downstream demand falls short of expectations, company technology development and market development falls short of expectations, industry competition intensifies, etc.