Incidents:

On October 23, 2024, Visheng Information released its report for the third quarter of 2024: in the first three quarters of 2024, the company achieved revenue of 1.9 billion yuan, +17% year over year; net profit of 0.42 billion yuan, +22% year over year; net profit without return to mother 0.41 billion yuan, +15% year on year; gross sales margin 39.1%, -1.6 pct year on year; net sales margin 21.8%, year on year +0.9 pct year on year.

Among them, 2024Q3 had revenue of 0.72 billion yuan, +11% YoY, -7%; net profit to mother 0.15 billion yuan, +14% YoY, -6% month-on-month; net profit of 0.15 billion yuan, +13% YoY, -7% month-on-month; gross sales margin 40.2%, -0.4pct yoy, +3.7pct month-on-month; net sales margin 21.0%, +0.7pct YoY, +0.2pct month-on-month.

Investment highlights:

The company's performance grew steadily in the first three quarters of 2024, and the quality of operations was high. In the first three quarters of 2024, the company's revenue and profit performance increased by double digits; the company's operating quality was high, the return on net assets was 14%, up 1.3 pct year on year; and the net cash flow from operating activities was 0.39 billion yuan, +74% year over year.

The company has sufficient orders in hand, and international business has become the “second engine” for growth. By the end of September 2024, the company had active orders of 3.8 billion yuan, +29% year-on-year. In the first three quarters of 2024, the company's overseas revenue was 0.33 billion yuan, +106% year-on-year, and international business contributed new momentum to growth. The company focuses on R&D investment. In the first three quarters of 2024, R&D expenses accounted for 9.1% of revenue; new product revenue reached 0.9 billion yuan, +32% over the same period, accounting for 47% of revenue.

Profit forecast and investment rating: The company is a leading domestic energy Internet of Things enterprise. The company is expected to achieve operating income of 2.6/3.2/3.9 billion yuan in 2024-2026, with year-on-year growth rates of +19%, +21%, respectively; net profit to mother is 0.65/0.8/1 billion yuan, with year-on-year growth rates of +23%, +24%, and EPS is 1.3/1.6/2.0 yuan. The current stock price corresponds to PE 32X, 26X, and 21X respectively. The company's performance has been growing steadily, and we have maintained the company's “buy” rating.

Risk warning: core competitiveness risk, business risk, industry risk, macro-environmental risk, overseas market expansion risk, raw material fluctuation risk.