Lexin Technology released a performance forecast for the first three quarters of 2024. The estimated revenue is 1.46 billion yuan, +42% year over year; net profit to mother is 0.251 billion yuan, +188% year over year. The company's new customers and applications continue to expand, and many new products continue to grow at a high rate, and profits are released at an accelerated pace. Maintain an “Overweight” rating.

Revenue increased year-on-year in the first three quarters of 2024, and profits were released rapidly. The estimated revenue for the first three quarters of 2024 was 1.46 billion yuan, +42% year over year; net profit to mother was 0.251 billion yuan, +188% year over year; after deducting non-net profit of 0.231 billion yuan, +238% year over year. The company rapidly released new products, and the gross margin remained above 40%. The most important R&D investment on the cost side increased by about 20% year-on-year, and the profit growth rate was significantly higher than the revenue growth rate.

24Q3 revenue and profit increased rapidly year over year. The estimated revenue for the 24Q3 quarter was 0.54 billion yuan, +50% YoY +1.3%; net profit to mother was 0.099 billion yuan, +340% /month-on-month +1.7%; after deducting non-net profit of 0.085 billion yuan, +491% YoY/-13% YoY. Benefiting from the rapid growth of sub-new products such as C2/C3/S3, and the gradual expansion of new customer projects, the company's 24Q3 revenue grew at a high year-on-year rate, and profits were released at an accelerated year-on-year rate; 24Q3 profit declined slightly month-on-month, mainly due to the effects of cost calculation, etc.

Looking ahead to 24Q4 year-on-year growth, many new products are expected to enter a period of high growth in 2025. 1) Looking ahead to 24Q4, considering that the fourth quarter is generally a peak season (24Q4 early preparation due to the impact of the Spring Festival in 2025), and the company is also actively preparing goods to cope with the recovery in demand, it is expected that 24Q4 revenue and profit will still perform well year over year; 2) Looking ahead to 2025, the company C6 has now begun to contribute revenue and is expected to be in a high growth state next year; the H2 series has already been mass-produced, and is expected to be achieved in 2025 Rapid growth; P4 began retail sales in July, and revenue contributions are expected to increase next year; C5 will begin to be produced in small quantities on the client side next year.

Investment advice. The company's domestic and international demand continues to recover, sub-new products are being released rapidly, new applications and customers are constantly increasing, and the competitive landscape is improving. The company's revenue and profit increased year-on-year in the first three quarters of 2024. We expect revenue of 2024/2025/2026 to be 1.96/2.48/3.01 billion yuan, adjust net profit to mother in 2024/2025/2026 to 0.34/0.44/0.56 billion yuan, corresponding PE is 39.1/30.4/23.8 times, maintaining an “increase” investment rating.

Risk warning: Risks that demand recovery falls short of expectations, product development progress falls short of expectations, intelligent penetration rate increases less than expected, new product release falls short of expectations, and industry competition intensifies.