LY iTECH(SZ:002600) Minsheng Securities·2024-07-07 07:30Investment Rating - The report maintains a "Recommended" rating for the company [2][3]. Core Views - The company is expected to achieve a net profit attributable to shareholders of 680-780 million yuan in the first half of 2024, representing a year-on-year decline of 45.52%-37.51% [2]. - The decline in profit is attributed to the significant increase in revenue from new businesses, which still have lower profitability compared to existing operations, a decrease in overall gross margin due to intensified industry competition, and a reduction in non-recurring gains compared to the previous year [2]. - The company is actively exploring the potential of artificial intelligence hardware and anticipates revenue growth in the third quarter as the consumer electronics peak season approaches [2]. - The company has established a solid foundation in consumer electronics and is building an AI terminal hardware manufacturing platform, with significant revenue growth in AI terminal and communication-related businesses [2]. - The company has a robust R&D system, with a total of 2,094 patents, including 240 invention patents, and emphasizes the importance of technical talent [2]. Financial Summary - The company forecasts total revenue of 40.469 billion yuan for 2024, with a growth rate of 18.59% [3]. - The net profit attributable to shareholders is projected to be 2.038 billion yuan for 2024, reflecting a slight decline of 0.62% [3]. - The company’s earnings per share (EPS) is expected to remain at 0.29 yuan for 2024, with a price-to-earnings (PE) ratio of 23 [3][7]. - The gross margin is projected to be 18.70% for 2024, with a net profit margin of 5.04% [7]. Business Development - The company achieved revenue of 30.687 billion yuan in AI terminal and communication-related businesses in 2023, with a gross margin of 21.62% [2]. - The automotive business saw a revenue increase of 43.61% year-on-year, reaching 1.697 billion yuan, while the photovoltaic energy storage business generated 1.555 billion yuan, up 29.89% [2]. - The company is focusing on developing cooling products for AI terminals, which are essential due to increased energy consumption [2].