Chengchang Technology(001270) Minsheng Securities·2024-08-24 11:00Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook based on its core competitiveness and long-term fundamentals [3]. Core Insights - The company reported a significant improvement in Q2 2024 performance, with a quarter-on-quarter revenue increase of 163.2%, although year-on-year revenue decreased by 58.4% [1]. - The company has implemented its first equity incentive plan since its listing, aimed at promoting long-term development by aligning employee interests with company growth [1]. - Despite short-term industry growth slowdown, the company remains one of the few domestic providers of complete and advanced phased array T/R chip solutions, indicating a stable long-term outlook [1]. Financial Performance Summary - In 1H24, the company achieved revenue of 72 million yuan, a year-on-year decline of 56.5%, and a net profit attributable to shareholders of -24 million yuan, compared to 65 million yuan in 1H23 [1]. - For Q2 2024, the company reported a revenue of 52 million yuan, with a net profit of -9 million yuan, showing a narrowing loss compared to Q1 2024 [1]. - The gross margin for Q2 2024 improved by 4.6 percentage points to 60.8%, while the net margin decreased by 59.9 percentage points to -18.0% [1]. Future Earnings Forecast - The company is projected to achieve net profits of 71 million yuan, 89 million yuan, and 104 million yuan for the years 2024, 2025, and 2026, respectively [2]. - The expected price-to-earnings (PE) ratios for 2024, 2025, and 2026 are 87x, 69x, and 59x, respectively, reflecting a gradual improvement in profitability [2]. Equity Incentive Plan - The equity incentive plan involves granting 3.77 million shares at a price of 19.76 yuan per share, with performance targets set for revenue growth of 20%, 35%, and 40% over the next three years [1].