Lianovation(SH:600363) ZHESHANG SECURITIES·2024-08-06 04:03Investment Rating - The report maintains a "Buy" rating for the company [3]. Core Views - The company plans to acquire additional equity in Jiangxi Lianchuang Superconducting Application Co., Ltd., increasing its stake from 40% to 51%, which will allow it to consolidate the superconducting business into its financial statements [1]. - The company's focus on its core businesses of laser, superconducting, and intelligent controllers has led to improved profitability, with a gross margin of 18.2% in 2023, up 3.42 percentage points year-on-year, and a net margin of 12.6%, up 2.68 percentage points year-on-year [1][2]. - The company expects a compound annual growth rate (CAGR) of 38% in net profit attributable to shareholders over the next three years, with projected net profits of 5.0 billion, 7.0 billion, and 8.8 billion yuan for 2024, 2025, and 2026, respectively [2]. Summary by Sections Acquisition and Business Strategy - The company intends to purchase an 8% stake from Jiangxi Electronics Group for 356.8 million yuan and a 3% stake from Gongqingcheng Zhinuo Jia Investment Center for 133.8 million yuan [1]. - The acquisition will enhance the company's strategic layout in the superconducting business [1]. Financial Performance - In 2023, the company reported a revenue of 3.24 billion yuan, a decrease of 2% year-on-year, while net profit attributable to shareholders was 339 million yuan, an increase of 27% year-on-year [2]. - The company achieved a gross margin of 20.5% in Q1 2024, reflecting a year-on-year increase of 3.57 percentage points [1]. Business Segments - The laser business has shown promising growth, with a revenue of 166 million yuan in 2023, maintaining the same level as the previous year, and a net profit of 36 million yuan [2]. - The superconducting business is expanding into new applications, with over 300 orders for high-temperature superconducting magnets, and a partnership with China Nuclear Fusion for a project with an estimated investment of over 20 billion yuan [2].