Hubei Feilihua Quartz Glass (SZ:300395) Minsheng Securities·2024-10-22 08:00Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook based on its strong product barriers and growth potential [1][3]. Core Views - The company reported a revenue of 1.314 billion yuan for the first three quarters of 2024, a year-over-year decline of 12.1%, and a net profit attributable to shareholders of 235 million yuan, down 42.8% year-over-year. The performance is largely in line with market expectations [1]. - The decline in demand from the aerospace sector has led to a temporary decrease in sales orders, impacting the company's financial performance [1]. - The company has increased its R&D investment significantly, with R&D expenses rising by 28.6% to 197 million yuan, reflecting a commitment to innovation and development [1]. Financial Performance Summary - For Q3 2024, the company achieved a revenue of 399 million yuan, down 15.5% year-over-year, and a net profit of 62 million yuan, down 49.5% year-over-year [1]. - The gross margin for the first three quarters of 2024 decreased by 8.2 percentage points to 42.4%, while the net margin fell by 10.7 percentage points to 18.5% due to reduced high-value product deliveries and increased operating expenses [1]. - The operating cash flow for the first three quarters was 137 million yuan, down from 295 million yuan in the same period last year [1]. Financial Forecasts - The company is projected to achieve net profits of 340 million yuan, 645 million yuan, and 952 million yuan for the years 2024, 2025, and 2026, respectively [2][4]. - The current stock price corresponds to a price-to-earnings (PE) ratio of 70x for 2024, 37x for 2025, and 25x for 2026, indicating a potential for growth as demand recovers [1][2]. R&D and Innovation - The company has formed a technical R&D team of 667 people, accounting for 24% of its total workforce, to tackle product technology challenges and achieve breakthroughs in quartz glass new materials [1]. - R&D expenses as a percentage of revenue increased to 15.0%, reflecting the company's strategy to enhance its technological capabilities [1].