TFC(SZ:300394) HTSC·2024-10-23 06:03Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 145.41 [1][4]. Core Insights - The company has experienced rapid revenue growth, with a 98.55% year-on-year increase in revenue to RMB 2.395 billion for the first three quarters of 2024, and a 122.39% increase in net profit attributable to shareholders to RMB 976 million [1]. - The company is expected to benefit from the increasing demand for AI computing power, particularly in the 400G and 800G optical communication sectors, as it has established a strong position in the supply chain of major global clients [3]. - Despite a lower-than-expected Q3 performance due to foreign exchange losses, the long-term growth outlook remains positive due to the anticipated demand from AI applications [1][3]. Summary by Sections Financial Performance - For Q3 2024, the company reported revenue of RMB 839 million, a 54.77% increase year-on-year, and a net profit of RMB 322 million, up 58.69% year-on-year [1][2]. - The overall gross margin for Q3 2024 was 59.04%, reflecting a year-on-year increase of 3.68 percentage points [2]. Future Projections - The projected net profits for the company from 2024 to 2026 are RMB 1.534 billion, RMB 2.237 billion, and RMB 2.923 billion, respectively [4]. - The company is expected to maintain a leading position in the optical components sector, with a target price based on a 36x PE ratio for 2025 [4]. Market Position - The company is well-positioned to capitalize on the AI computing power demand, with ongoing developments in 1.6T optical modules expected to contribute to future revenue growth [3]. - The company has a market capitalization of RMB 68.297 billion and a closing price of RMB 123.30 as of October 22, 2023 [6].