TORCH ELECTRON(SH:603678) Soochow Securities·2024-08-21 04:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 1.427 billion yuan in the first half of 2024, a year-on-year decrease of 9.58%, and a net profit attributable to shareholders of 164 million yuan, down 35.24% year-on-year [1] - The company is experiencing a slowdown in downstream demand recovery due to industry fluctuations, leading to a decline in sales revenue, particularly in high-margin self-owned businesses [1] - The company has initiated a share buyback program, indicating a strong financial position and sufficient cash flow, which may enhance shareholder returns [2] - The company maintains a stable position in the electronic components sector and is actively expanding into new markets, with a focus on Southeast Asia [2] - The company expects strong growth in defense demand and a recovery in downstream military orders, which will drive revenue growth in its components business [2] Financial Performance Summary - The company achieved total revenue of 3.504 billion yuan in 2023, with projections of 3.949 billion yuan in 2024, 4.787 billion yuan in 2025, and 5.584 billion yuan in 2026, reflecting a year-on-year growth of 12.70% in 2024 [8] - The net profit attributable to shareholders is projected to be 453.22 million yuan in 2024, 625.08 million yuan in 2025, and 762.04 million yuan in 2026, with corresponding P/E ratios of 23, 17, and 14 [2][8] - The company's earnings per share (EPS) is expected to increase from 0.99 yuan in 2024 to 1.66 yuan in 2026 [8] - The company’s total assets are projected to grow from 8.310 billion yuan in 2024 to 9.794 billion yuan in 2026 [8] Market Position and Strategy - The company has been recognized as a key player in the electronic components industry for 12 consecutive years, indicating a strong competitive position [2] - The company is leveraging its established supply chain management and strategic partnerships to enhance its market share and brand influence [2] - The new materials segment is expected to contribute to profitability growth, driven by policy support and efficient collaboration within the supply chain [2]