Description of the event

The company's 2024Q1-3 gross revenue was 2.328 billion yuan (YoY +15.31%); net profit to mother was 0.333 billion yuan (YoY +22.17%), after deducting non-net profit of 0.337 billion yuan (YoY +23.05%).

Incident comments

Revenue has maintained steady growth, and profits have been released rapidly. The company's 2024Q1-3 gross revenue was 2.328 billion yuan (YoY +15.31%); net profit to mother was 0.333 billion yuan (YoY +22.17%), after deducting non-net profit of 0.337 billion yuan (YoY +23.05%).

The company's total revenue for 2024Q3 was 0.574 billion yuan (+15.77%); net profit to mother was 38.0733 million yuan (YoY +108.84%), after deducting non-net profit of 35.4483 million yuan (+71.85% YoY). The company's total revenue +△ contract liabilities for Q1-3 in 2024 was 2.229 billion yuan (+14.85% YoY), of which total revenue for 2024Q3 +△ contract liabilities were 0.568 billion yuan (+16.78% YoY).

Gross margin came under some pressure in the third quarter, and net interest rates rose as sales expenses improved. The company's 2024Q1-3 net profit margin increased 0.8 pct to 14.3%, gross margin +0.65 pct to 64.14% year on year, and the period expense ratio was -1 pct to 31.94% year on year. Among the detailed changes: sales expenses ratio -0.93 pct year over year, management expenses ratio +0.1 pct year over year, R&D expenses ratio was -0.25 pct year over year, financial expenses ratio +0.08 pct year over year, sales tax and surcharges -0.15 pct year over year. The company's 2024Q3 net interest rate increased 2.95 pct to 6.63% year on year, gross margin -1.52 pct year on year, and the period expense ratio was -4.17 pct to 39.49% year over year, with detailed changes: sales expense ratio -3.19 pct year on year, management expense ratio -1.81 pct year on year, R&D expense ratio +0.46 pct year on year, financial expense ratio +0.37 pct year on year, sales tax and additional rate +0.01pct year over year.

The product structure is continuously optimized. The company's revenue for products over 300 yuan in the first three quarters was 0.472 billion yuan (+43.8%), revenue for products over 300 yuan in the third quarter was 0.16 billion yuan (+42.06% year over year); revenue from 100-300 yuan products in the first three quarters was 1.199 billion yuan (+14.96% year over year), and revenue from 100-300 yuan products in the third quarter was 0.309 billion yuan (+14.92% year over year); revenue for products under 100 yuan in the first three quarters was 0.598 billion yuan billion yuan (-2.54% YoY), revenue for products under 100 yuan in the third quarter was 0.077 billion yuan (-24.33% YoY).

The company's 2024/2025 EPS is expected to be 0.79/0.95 yuan, and the 2024/2025 net profit to mother is 0.399/0.484 billion yuan, corresponding PE is 27/23 times, maintaining a “buy” rating.

Risk warning

1. Industry demand falls short of expectations;

2. Increased market price fluctuations, etc.