Revenue for the first 3 quarters was +23.0% YoY, after deducting non-net profit +11.2% YoY, which was basically in line with expectations.

Revenue for the first three quarters of 24 years was 1.813 billion yuan, +23.0% year on year, net profit to mother 0.196 billion yuan, +4.5% year over year, after deducting non-net profit of 0.164 billion yuan, +11.2% year over year.

24Q3 had revenue of 0.63 billion yuan in a single quarter, -4.0% month-on-month, net profit of 0.067 billion yuan, deducted non-net profit of 0.05 billion yuan, -26.1% month-on-month, mainly due to the company's financial expense ratio of +1.86pct month-on-month and gross margin of -0.94pct month-on-month in the Q3 quarter, resulting in Q3 deducting non-net interest rate of -2.37 pcts month-on-month.

H2 Smart Security's revenue is expected to continue to grow, and the video intercom business will benefit from new orders such as sweepers.

1) The largest business is the smart security SoC business. 24H1 has revenue of 0.812 billion yuan, accounting for 68.7% of total revenue and 33.58% gross profit margin. Considering that the consumer side is expected to maintain a good growth trend in the Q4 quarter and that the traditional security sector is expected to improve overall, it is expected that H2 business revenue will continue to grow.

2) The second largest business is the video intercom SoC business. 24H1 has revenue of 0.246 billion yuan, accounting for 20.8% of total revenue and 45.99% gross profit margin. Considering that the company's sweepers and industrial HMI businesses have acquired leading brand customers and begun batch shipments, it is expected that H2 will benefit from the release of order volume to drive the growth of this business.

On December 20, the SSC309QL smart glasses solution was released to actively lay out the 100 billion market for AI glasses.

AI glasses are an important and high-volume carrier for AI landing on the end side. Using low power technology accumulated in the field of security, the company actively lays out a new circuit for AI glasses with industry-leading ISP visual effects and advanced process SoC capabilities. On December 20, at the 2024 developer conference, the company released the SSC309QL for AI glasses. It uses chiplet technology with a built-in LPDDR4 (2Gb) highly integrated solution. The area was reduced by 24% compared to AR1 using external DDR, the width was reduced by 20%, and the SoC power consumption was as low as 30mW.

The company's AI glasses-related SoC chips have already been connected to some customers, and terminal products are expected to be launched in the second half of 2025. At the same time, the company's SSC3010 and other next-generation smart glasses chip solutions have also been put on the development schedule, focusing on better image processing, smaller packages, lower power consumption, and better AI processing capabilities, which will help smart glasses advance to the 100 billion market.

The leading domestic video security chip, covered for the first time, was given an “increase in weight” rating.

As a leading domestic video security chip, the company combines its excellent low power consumption technology, ISP technology, and SoC capabilities to actively lay out end-side AI applications, and has broad room for future growth. The company's net profit from 2024 to 2026 is estimated to be 0.253/0.351/0.483 billion yuan, respectively, corresponding to the 24/25/26 PE of 140/101/73. It was covered for the first time, giving it an “increase in wealth” rating.

Risk warning: R&D falls short of expectations; risk of market competition; risk of international trade friction; risk of exchange rate fluctuations, etc.