Revenue for the first three quarters of 2024 increased 12.97% year over year, and net profit to mother increased 7.53% year over year. In the first three quarters of 2024, the company achieved revenue of 32.313 billion yuan, a year-on-year increase of 12.97%; a comprehensive gross profit margin of 29.26%, a year-on-year decrease of 0.04 pct; and net profit to mother of 4.473 billion yuan, an increase of 7.53% year-on-year. We believe that the growth rate of the company's net profit to mother is lower than the revenue growth rate mainly due to the 0.65 pct year-on-year increase in the period rate, etc.

Rates increased year over year during the first three quarters of 2024. In the first three quarters of 2024, the company's rate for the period was 13.17%, an increase of 0.65pct over the previous year. Among them, sales rates and management rates decreased year-on-year, while R&D rates and financial rates increased year-on-year.

Let's take a look specifically:

(1) The sales rate was 4.61%, a year-on-year decrease of 0.08pct. (2) The management fee rate was 2.77%, a year-on-year decrease of 0.09pct.

(3) The R&D rate was 6.49%, an increase of 0.39pct over the previous year. (4) The financial rate was -0.71%, an increase of 0.44pct over the previous year.

Revenue for the third quarter of 2024 increased 18.19% year over year, and net profit to mother increased 6.27% year over year. In the third quarter of 2024, the company achieved revenue of 12.199 billion yuan, a year-on-year increase of 18.19%; a comprehensive gross profit margin of 29.63%, a year-on-year decrease of 0.88pct; and net profit to mother of 1.764 billion yuan, an increase of 6.27% year-on-year.

We believe that the growth rate of the company's net profit to mother is lower than the revenue growth rate mainly due to a 0.88pct year-on-year decrease in gross margin and a 0.70pct year-on-year increase in the period rate.

Rates increased year over year during the third quarter. In the third quarter of 2024, the company's rate for the period was 12%, an increase of 0.70pct year-on-year. Management rates declined year on year, and R&D rates, sales rates, and financial rates all increased year over year to varying degrees.

Let's take a look specifically:

(1) The sales rate was 4.27%, a year-on-year increase of 0.18pct. (2) The management fee rate was 2.45%, a year-on-year decrease of 0.24pct.

(3) The R&D rate was 5.50%, an increase of 0.22pct over the previous year. (4) The financial rate was -0.23%, an increase of 0.54 pct over the previous year.

The company is expected to benefit deeply from speeding up the construction of a new power system. In January-September, the domestic power grid project completed an investment of 398.2 billion yuan, an increase of 21.1% over the previous year. In 2024, construction of the Aba-Chengdu East UHV AC, North Shaan-Anhui UHVDC and Qinghai-Tibet DC Phase II expansion projects began, the adjustment of the “West to East Transmission” channel in North China, 750 kV in Qinghai Hongqi, and a number of key projects were put into operation. The level of digitalization and intelligence of power grids continues to improve.

We believe that the company is a supplier of smart grid technology, products and integrated overall solutions. It is in a leading position in the market and is expected to benefit deeply.