QIFAN(605222) Orient Securities·2024-09-02 09:09Investment Rating - The report maintains a "Buy" rating for the company with a target price of 16.52 CNY, based on an adjusted EPS forecast for 2024-2026 [2][4]. Core Insights - The company reported a slight decline in revenue for the first half of 2024, with a revenue of 10.288 billion CNY (-3.55%) and a net profit of 187 million CNY (-24.39%). However, the second quarter showed a sequential improvement with a revenue of 5.488 billion CNY (-10.14%) and a net profit of 102 million CNY (+9.55%) [1]. - The company has a robust order backlog, with contract liabilities increasing by 19.20% year-on-year, indicating future growth potential [1]. - The company is expanding into high-value subsea cable markets, having achieved significant milestones in product testing and project acquisition [1]. Financial Summary - Revenue projections for the company are as follows: 2024E at 29.127 billion CNY, 2025E at 33.709 billion CNY, and 2026E at 38.399 billion CNY, reflecting growth rates of 24.7%, 15.7%, and 13.9% respectively [3]. - The company's net profit is projected to grow from 494 million CNY in 2024E to 883 million CNY in 2026E, with corresponding EPS estimates of 1.18 CNY, 1.67 CNY, and 2.11 CNY [3][2]. - The gross margin is expected to stabilize around 6.0% in 2024E, with a slight increase to 6.8% by 2026E [3].