Investment Rating - The report assigns a stock rating of NR (Not Rated) for CDOT (00334.HK) [3] Core Insights - The report indicates that it is too early to be optimistic about CDOT's performance, highlighting stagnant sales volume in Q2 2024 and a potential rebound in the second half of the year [3] - CDOT recorded RMB 909.3 million in revenue for Q2 2024, reflecting a year-on-year increase of 43.3%, despite a significant drop in shipping volume [3] - The gross margin has decreased to 3.8% in 2024 H1, raising concerns about profit margins and the company's ability to withstand market fluctuations [3] Financial Performance Summary - Revenue for CDOT has shown fluctuations over the years: - 2020: RMB 3,571.2 million - 2021: RMB 5,840.1 million - 2022: RMB 4,208.4 million - 2023: RMB 2,576.8 million [3][12] - The net profit has also varied significantly: - 2020: RMB 6.3 million - 2021: RMB 199.7 million - 2022: RMB 169.0 million - 2023: RMB 13.1 million [3][12] - The gross margin has decreased from 7.8% in 2020 to 6.8% in 2023, with a notable drop to 3.8% in 2024 H1 [3][12] - The report notes a significant decline in sales volume for display modules, particularly for smartphones, which fell by 51.0% year-on-year in Q2 2024 [3] Market Dynamics - The sales volume of display modules for tablets and learning devices has increased, contributing 31.3% to total revenue in Q2 2024, indicating a diversification in revenue sources [3] - The report emphasizes the importance of improving bargaining power and profit margins for a potential turnaround in the company's performance [3]
华显光电：Too early to be optimistic