Event description

In the first three quarters of 2024, the company achieved revenue of 733 million yuan, a year-on-year increase of -13.32%; net profit attributable to the parent company was 132 million yuan, a year-on-year increase of -35.58%; net profit after deducting non-attributable to the parent company was 121 million yuan, a year-on-year increase of -33.37%.

In a single quarter, the company's Q3 revenue was 211 million yuan, a year-on-year increase of -6.96%; net profit attributable to the parent company was 19 million yuan, a year-on-year increase of -40.32%; net profit after deducting non-attributable to the parent company was 24 million yuan, a year-on-year increase of +2.41%.

Event Comments

Downstream demand was under pressure, and the decline in Q3 narrowed. Affected by sluggish downstream demand and weak customer capital expenditure, the revenue of the company's 3C and lithium battery industries in 24H1 decreased by 8.45% and 37.37% year-on-year respectively, and it is expected that Q3 will still be relatively under pressure. The decline in 3C is expected to be mainly due to the weaker-than-expected demand from the industry, the small change in the new generation of products from large end customers, and the weakening of the demand for machine vision. The decline of lithium battery is mainly due to the impact of fluctuations in the expansion cycle of the industry, and the continued sluggish demand of the industry. Looking ahead, the proportion of new energy revenue is expected to decline gradually, the 3C industry is expected to usher in a recovery, and the decline in revenue in Q3 has narrowed.

The decline in gross profit margin and the increase in selling expense ratio affected performance. 24Q3 gross profit margin was 59.84%, -3.93pct year-on-year, and the company's net profit margin was 8.81%, -4.92pct year-on-year. On the one hand, the downstream 3C-related demand was not repaired as expected, the demand for lithium batteries was still under pressure, the industry competition intensified, and the company's gross profit margin declined slightly. On the other hand, due to the decline in revenue scale, the company's scale effect declined, and the expense ratio increased by 2.2 pct year-on-year. Specifically: 1) 24Q3 The company's sales expense ratio was 31.92%, +5.39pct year-on-year; 2) The administrative expense ratio was 3.89%, -0.11 pct year-on-year, 3) the R&D expense ratio was 22.01%, -2.65 pct year-on-year, and 4) the financial expense ratio was -0.48%, -0.47 pct year-on-year. In terms of expense breakdowns, it is expected that the expansion of product lines, increased overseas investment, and increased personnel will be affected mainly by the increase in sales expense ratio.

The product matrix has been basically formed, and the deep learning (industrial AI) + overseas layout has been continuously improved. As of 24H1, the company has completed the layout of the whole product line of machine vision core software and hardware, and on the basis of traditional visual component products, the company has also expanded visual sensor products such as smart code readers, 3D sensors, and one-key measurement sensors, and the self-production rate of core components has been significantly improved.

In the cutting-edge field, the company has launched a cloud version of the deep learning-based vision platform, which is deeply integrated with the company's intelligent software platform Smart3 software, which further lowers the threshold for the use of AI technology. In terms of overseas layout, in order to cooperate with the overseas strategy of downstream customers, the company increased investment in overseas markets in the first half of the year, set up a Vietnamese company, and increased the resource investment of the Indian office. As of 24H1, the company has 107 employees in overseas markets, providing necessary technical research and development and market support to local customers.

Maintain "Buy" rating. Taking into account the downstream demand recovery process and the company's business expansion, we expect the company to achieve net profit attributable to the parent company of 1.75, 2.78 and 388 million yuan from 2024 to 2026, and the corresponding PE is 41, 26 and 19 times, maintaining a "buy" rating.



Risk Reminder 1: The risk that downstream demand is less than expected;

2. The risk of intensified competition in the industry.