ELECSPN(002935) 华泰证券·2024-10-24 04:03Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 19.82 [1][7]. Core Views - The company reported a Q3 revenue of RMB 198 million, a year-over-year decrease of 12.03% and a quarter-over-quarter decrease of 26.95%. The net profit attributable to the parent company was RMB 483,900, down 91.27% year-over-year and 98.03% quarter-over-quarter. For the first three quarters of 2024, the company achieved a revenue of RMB 577 million, a year-over-year decrease of 10.20%, and a net profit of RMB 15.94 million, down 32.02% year-over-year. The decline in performance is attributed to delays in product delivery and increased credit impairment provisions. However, the military industry is expected to see a demand rebound, leading to potential performance improvement next year [1][4]. Summary by Sections Financial Performance - Q3 gross margin was 26.01%, an increase of 1.03 percentage points year-over-year. The gross margin for the first three quarters was 26.49%, a decrease of 0.11 percentage points year-over-year. The expense ratio for the first three quarters was 21.07%, an increase of 0.46 percentage points year-over-year. Sales, management, and R&D expenses decreased as a percentage of revenue [3][4]. Industry Position - The company remains a core supplier of military high-end frequency products, with strong demand expected from missile data link developments and satellite internet construction. The company has a competitive edge in satellite atomic clocks and high-stability crystal oscillators [4][5]. Profit Forecast and Valuation - The forecasted net profits for 2024-2026 are RMB 89.47 million, RMB 136.31 million, and RMB 179.76 million, respectively. The corresponding EPS is projected to be RMB 0.21, RMB 0.32, and RMB 0.42. The target price is based on a PE ratio of 62 times for 2025 [5][6].