LONGSHINE(SZ:300682)2024-10-21 06:03Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of RMB 15.37, reflecting a PE of 30x for 2024 [4][9]. Core Insights - In Q1 2024, the company's core business showed steady progress, with revenue reaching RMB 668 million, a year-on-year increase of 2.27%. However, net profit attributable to shareholders declined to RMB -19 million, a drop of 195.80% year-on-year, and recurring net profit was RMB -46 million, down 1444.87% year-on-year [9]. - The decline in performance was attributed to several factors, including a significant drop in revenue from the internet TV business due to regulatory challenges and increased competition, which saw a decline of over 30% year-on-year. Additionally, the company incurred one-time optimization costs from restructuring its non-energy digital business and increased share-based payment expenses due to an equity incentive plan [9][4]. - The energy digitalization and internet core business continued to grow, with increased operating net cash flow. The company has over 26 years of experience in the power energy sector, which has strengthened its market position and expanded its reach into new provinces [9][4]. Business Segments Summary - Energy Digitalization: Expected revenue growth of 10% annually from 2024 to 2026, with stable gross margins around 38.50% [6][4]. - Energy Internet: Revenue is projected to grow significantly, with a year-on-year increase of 38.97% in 2023, and expected growth rates of 27.50% and 30.00% in the following years. Gross margins are expected to stabilize around 38.00% [6][4]. - Internet TV: This segment is projected to see a decline in revenue, with expected decreases of 32.31% in 2023 and further declines in subsequent years, reflecting a shift in focus towards energy-related services [6][4]. Financial Forecast - The company anticipates revenues of RMB 5.12 billion, RMB 5.90 billion, and RMB 6.93 billion for 2024, 2025, and 2026, respectively. Net profits are expected to be RMB 556 million, RMB 677 million, and RMB 849 million for the same years [4][9]. - The overall gross margin is projected to remain stable, with slight increases from 38.2% in 2024 to 38.8% in 2026 [4][6].