公司Q3 销售、管理、财务、研发费用率分别为0.95%、2.35%、-0.49%、9.12%，分别同比-0.23pct、-0.10pct、+0.24pct、-0.33pct。信用减值损失-0.04亿元，同比-157%，带来净利率同比-2.36pct。Key points of investment:
Domestic network equipment ODM leader. The company is a leading domestic network equipment manufacturer, supplying downstream brands through the main ODM/auxiliary OEM model. The company has scarce high-end network equipment manufacturing capabilities. Currently, it can develop high-bandwidth, high-capacity switches. The product line covers switch and router products based on various solutions, and has already entered downstream leaders such as Xinhua 3 and S customers, Xiaomi, and Shenzhou Digital.
Due to changes in business models and increased competition in the industry, performance fluctuated in the short term. The company's revenue for the first three quarters was 1.257 billion yuan, -15.61% year on year, net profit to mother 0.104 billion yuan, -14.08% year on year, gross profit margin 17.87%, +0.63 pct year on year, net profit margin 8.30%, and +0.15 pct year on year. The company's 24Q3 revenue was 0.434 billion yuan, -12.84% YoY, +4.00% month-on-month, net profit 0.028 billion yuan, -9.37% YoY, -33.40% month-on-month, gross profit margin 18.33%, +2.42pct YoY, -0.41pct month-on-month, net profit margin 6.47%, YoY +0.25pct, YoY -3.63pct. The development of the global economy and trade is complex. The competitive trend in the network communications industry continues to intensify, commercial competition is fierce, and the company's performance is under pressure. In addition, the company's cooperative settlement model with major S customers has changed, that is, some of the customer's products use a “customer supply-non-settlement method”, which has a certain impact on the overall sales revenue and gross margin of the product.
The company's Q3 sales, management, finance, and R&D expenses rates were 0.95%, 2.35%, -0.49%, and 9.12%, respectively, -0.23pct, -0.10pct, +0.24pct, and -0.33pct, respectively. Credit impairment losses were -0.004 billion yuan, -157% YoY, resulting in a net interest rate of -2.36pct YoY.
Switches expand the mid-to-high-end product line and enter the white box market. In the middle and high-end data center switch product section, the company iterated 12.8T and other product forms on 200G/400G/2.0T/8.0T data center switches and expanded COME modules based on domestic CPUs. At the same time, the company has developed its own white box switch products and is currently promoting related business cooperation in an orderly manner.
Continued breakthroughs in overseas markets. The company has gradually expanded its overseas business in recent years. Currently, it has Japanese and South Korean customers, gradually forming stable orders and continuous mass production and delivery. Currently, it is actively cooperating with customers in all aspects of production and operation.
Invest in upstream switching chips in the industrial chain. The company announced in August that the company, as a limited partner, and general partner Xihe Investment and other limited partners jointly invested in Shenzhen Feiling Nanxin Investment Partnership to invest in shares of unlisted companies. It is a network equipment Ethernet switch chip-related company, with a total investment of 54.51 million yuan. The company, as a limited partner, has pledged a capital contribution of RMB 20 million with its own capital, accounting for 36.69% of the total capital pledged by the partnership. At present, the partnership has signed an equity transfer agreement with one of the shareholders of the target company. The transferee holds shares in the company corresponding to the target company's registered capital of 0.07876 million yuan with 50 million yuan and has completed the payment of 50 million yuan of advance equity transfer payments.
Profit forecasting and investment advice. We expect the company's 24-26 revenue to be 2.024 billion yuan, 2.614 billion yuan, and 3.258 billion yuan, respectively, net profit to mother of 0.144 billion yuan, 0.195 billion yuan and 257 million yuan, respectively, and EPS of 2.07 yuan, 2.82 yuan, and 3.71 billion yuan, respectively. Referring to comparable company valuations, a 25-year 35-40x PE was given, corresponding to a reasonable value range of 98.67 yuan - 112.76 yuan, and a “superior to the market” rating.
Risk warning. The order share of core customers fell short of expectations, the capital expenses of cloud vendors and operators fell short of expectations, and raw material prices rose sharply.
