GONGJIN(603118) 华创证券·2024-09-25 17:35Investment Rating - The investment rating for the company is downgraded to "Recommended" [1] Core Views - The company's revenue for H1 2024 is 3.991 billion, a year-on-year decline of 8.36%, with a net profit attributable to shareholders of -0.16 billion, down 108.15% year-on-year [1] - The decline in revenue and profit is primarily due to the challenges faced in the network communication business, which accounts for over 80% of the company's revenue structure [1] - Emerging businesses are experiencing rapid growth, particularly in the data communication sector, which is expected to benefit from AI construction demand [1] Financial Summary - Total revenue (million): 2023A: 8,530; 2024E: 7,866; 2025E: 9,207; 2026E: 11,512 [2] - Year-on-year growth rate (%): 2023A: -22.3%; 2024E: -7.8%; 2025E: 17.0%; 2026E: 25.0% [2] - Net profit attributable to shareholders (million): 2023A: 65; 2024E: 71; 2025E: 209; 2026E: 313 [2] - Year-on-year growth rate for net profit (%): 2023A: -71.5%; 2024E: 10.0%; 2025E: 193.4%; 2026E: 50.1% [2] - Earnings per share (CNY): 2023A: 0.08; 2024E: 0.09; 2025E: 0.27; 2026E: 0.40 [2] - Price-to-earnings ratio: 2024E: 76; 2025E: 26; 2026E: 17 [2] - Price-to-book ratio: 2024E: 1.1; 2025E: 1.0; 2026E: 1.0 [2] Business Segment Performance - Network communication business is facing significant pressure due to a decline in demand and price wars, leading to a notable impact on profitability [1] - Data communication business revenue decreased by 34.36% year-on-year, but gross margin increased by 1.12 percentage points [1] - Mobile communication business revenue increased by 2.63% year-on-year, with FWA business sales exceeding 26 million, a growth of over 700% [1] - Automotive electronics business saw sales of nearly 100 million, a year-on-year increase of over 360% [1] Future Outlook - The company expects revenue for 2024-2026 to be 7.866 billion, 9.207 billion, and 11.512 billion respectively, with net profits of 0.71 billion, 2.09 billion, and 3.13 billion [1] - The demand for high-speed Ethernet switches is anticipated to grow significantly due to the rapid development of cloud computing and big data, particularly driven by AI [1]