Revenue reached another record high of 0.517 billion yuan in the third quarter of 2024. Third-quarter revenue increased 6% month-on-month and 87% year-on-year, and revenue achieved month-on-month growth for five consecutive quarters; net profit to mother -0.142 billion yuan, net profit not to mother -0.155 billion yuan. In the first three quarters of 2024, the company achieved operating income of 1.37 billion yuan, an increase of 36% over the previous year. Net profit attributable to shareholders of listed companies was -0.408 billion yuan, net profit not attributable to mother was -0.441 billion yuan, and net cash flow from operating activities was 32.89 million yuan.

Automotive electronics continues to expand, revenue is growing rapidly, and market demand is strong. Benefiting from the growing demand in the automotive electronics market and the company's continued investment in the automotive sector, 24Q3 automotive electronics revenue reached 0.196 billion yuan, up 26% month-on-month, accounting for 38% of revenue in a single quarter, up 6 pcts month-on-month. The company's market share in the automotive tri-electric field, especially the driver chips for the electronic control part of electric vehicle power motors, has increased significantly; multi-channel taillight driver chips, magnetic current sensor chips, and some interface chips have already been shipped on a large scale. This year, motor drive chips and integrated motor drive SOC chips have also begun to secure multiple project targets from leading customers in the market. It is expected that next year they will enter the large-scale mass production stage and achieve rapid growth. High-side switch products will be mass-produced next year, and MCU main control products for the energy and automotive power supply fields are expected to be officially launched on the market from the end of the year to the beginning of next year. Next year, the company will focus on the cockpit sector, and is expected to achieve mass production and release of video transmission Serdes chips, power management chips, audio amplifier chips, and automotive audio bus A2B products. According to the company's disclosure, demand is strong in the automotive electronics market, especially in the Chinese market. Driven by new energy vehicles, new materials are showing growth opportunities, and overall demand is quite strong.

The overseas layout is progressing smoothly. The company has branches in Germany, Japan, South Korea and other countries, and is equipped with localized service sales teams, etc., and has passed supplier certification for many overseas tier 1 customers, and some customers have begun stable supply. The company focuses on in-depth cooperation with leading overseas tier 1 automobile manufacturers. Recently, it has reached a strategic cooperation with Continental Group to jointly develop automotive-grade pressure sensor chips with functional safety characteristics. The pressure sensor chip will be based on Continental Group's next-generation global platform, and will focus on improving reliability and accuracy, and can be used to achieve safer and more reliable car airbags, car side collision monitoring, and battery pack collision monitoring systems.

We forecast the company's revenue for 24-26 years to be 1.91/2.6/3.26 billion yuan respectively (the original forecast was 3.46 billion yuan for 24, which mainly reduced revenue and gross profit margin and raised the expense ratio). We used the PS valuation method, based on the average of 7.5 times the PS valuation of comparable companies in 2025, and the corresponding target price was 136.40 yuan, maintaining a “buy” rating.

Risk warning

Technological innovation falls short of expectations; market competition risks; downstream demand falls short of expectations; profitability recovery falls short of expectations; negative impact on valuation.