GONGJIN(SH:603118) Dongxing Securities·2024-08-21 01:01Investment Rating - The report maintains a "Recommended" investment rating for the company [1]. Core Views - The company's revenue for the first half of 2024 was 3.991 billion yuan, a year-on-year decrease of 8.4%, with a net profit attributable to shareholders of -16 million yuan compared to 202 million yuan in the same period last year [1]. - The decline in revenue is primarily attributed to insufficient demand in the domestic network communication market, with both volume and price falling [1]. - The company has successfully expanded its customer base in the data communication and automotive electronics sectors, with significant growth in automotive electronics sales, which increased by over 360% year-on-year [1]. - The company expects a slight decline in overall revenue for the year, but anticipates a turnaround in profitability through cost reduction and efficiency improvements [1]. Financial Performance Summary - In the first half of 2024, the company's operating costs were 3.539 billion yuan, with a gross margin of 11.3%, down 2.0 percentage points year-on-year [1]. - The company forecasts operating revenues of 8.332 billion yuan, 8.864 billion yuan, and 9.328 billion yuan for 2024, 2025, and 2026 respectively, with net profits of 216.77 million yuan, 273.67 million yuan, and 315.23 million yuan for the same years [2][3]. - The company’s revenue from its PON series products increased by 0.56% year-on-year, while revenue from AP series products and DSL products decreased by 15.05% and 7.88% respectively [1]. Customer Expansion and Market Outlook - The data communication segment has begun delivering 800G data center switches, and the automotive electronics segment has added three new mass production customers [1]. - The company has made significant progress in expanding its overseas customer base, with nearly ten overseas clients for its switches [1]. - The report suggests that the data communication market may improve in the second half of the year due to the delivery of 400G and 800G switches [1].