Juxin Technology's 2024Q3 gross profit margin was 48.2%, QoQ+0.9pct, YOY+2.7pcts. Since the beginning of 2024, the company's Bluetooth speaker SoC penetration rate in leading brands has increased steadily, revenue from low-latency and high-quality sound products has increased dramatically, and edge AI revenue has increased at a rapid rate. Maintain an increase in holdings rating.

Key points to support ratings

Product structure and customer structure optimization drive an increase in gross margin. Juxin Technology's revenue for the first three quarters of 2024 was 0.467 billion yuan, YoY +24%; gross profit margin was 47.1%, YoY+4.1pcts; net profit to mother was 0.071 billion yuan, YoY +51%. Juxin Technology's 2024Q3 revenue was 0.186 billion yuan, QoQ +15%, YoY +19%; gross profit margin 48.2%, QoQ +0.9pct, YoY+2.7pcts; net profit to mother 0.03 billion yuan, QoQ -8%, YoY +35%.

Since the beginning of 2024, Juxin Technology has closely grasped market demand and technological development trends, and adopted an active sales strategy to achieve a significant increase in revenue. At the same time, the company's product structure and customer structure have been continuously optimized, and the sales share of high-margin products has continued to increase, thereby increasing the company's overall profit level.

The penetration rate of Bluetooth speaker SoC in leading brands has been steadily increasing, and revenue from low-latency, high-quality sound products has increased dramatically. Juxin Technology is one of the important suppliers of Bluetooth speaker SoC chips in the world. The company's high-end Bluetooth speaker SoCs have entered the supply chain of international Tier 1 and 2 brands such as Harman, Sony, Anke Innovation, Honor, and Xiaomi. Since the beginning of 2024, the company's Bluetooth speaker SoC has been steadily increasing in penetration among leading audio customers. The company is actively developing the wireless audio SoC market with low latency and high sound quality. Currently, it has covered market segments such as wireless home theater audio systems, wireless microphones, radio sports headsets, and wireless transceiver dongles. In the first three quarters of 2024, the company's sales revenue for low-latency, high-quality wireless audio products increased dramatically.

Edge AI revenue doubled in the first three quarters of 2024. As demand for edge AI computing increases, the company launched end-side AI processors for audio products based on a multi-core heterogeneous AI computing architecture. In the first half of 2024, the company's end-side AI processors were shipped on a large scale to international first-tier audio brand customers. According to Juxin Technology's 2024 semi-annual report, the company's next-generation audio DSP processing chip ATS361X is also in the project development stage and is expected to be mass-produced in the second half of the year. In the first three quarters of 2024, the company continued to release edge AI processor chips, and sales revenue increased exponentially.

valuations

Juxin Technology's 2024/2025/2026 EPS is expected to be 0.66/0.82/0.99 yuan, respectively.

As of the close of October 30, 2024, the company's total market value was about 4.5 billion yuan, corresponding to 2024/2025/2026 PE 46.4/37.3/31.1 times, respectively. Maintain an increase in holdings rating.

The main risks faced by ratings

Market demand fell short of expectations. Downstream penetration falls short of expectations. Product iterations are falling short of expectations. The competitive landscape in the market deteriorated.