Dingtong(688668) 长城证券·2024-10-25 06:54Investment Rating - The report maintains a "Buy" rating for the company [1][2] Core Views - The company achieved both revenue and profit growth in the first three quarters of 2024, driven by the recovery of communication orders and increasing demand for 112G products [2] - Revenue for the first three quarters of 2024 reached RMB 703 million, a year-on-year increase of 43.24%, while net profit attributable to the parent company was RMB 78.34 million, up 47.72% year-on-year [2] - The company continues to increase R&D investment, with R&D expenses reaching RMB 62.86 million in the first three quarters of 2024, a year-on-year increase of 16.32% [2] - The company's 112G products are gaining traction, with demand increasing significantly, and the company is actively developing liquid cooling solutions for high-speed connectors [2] - The company's capacity utilization in Dongguan is gradually improving, reaching near saturation, while its subsidiary in Xinyang focuses on automotive connectors, with plans to further enhance capacity utilization [2] Financial Performance Summary Revenue and Profit - Revenue for 2024 is projected to be RMB 901 million, with a year-on-year growth rate of 32.0%, and is expected to reach RMB 1.594 billion by 2026 [1] - Net profit attributable to the parent company is forecasted to be RMB 95 million in 2024, with a year-on-year growth rate of 42.8%, and is expected to reach RMB 171 million by 2026 [1] - In Q3 2024, the company achieved revenue of RMB 251 million, a year-on-year increase of 58.15%, and net profit attributable to the parent company of RMB 29.04 million, up 262.57% year-on-year [2] Profitability - The company's gross margin for the first three quarters of 2024 was 28.39%, slightly down by 0.1 percentage points year-on-year, while the net profit margin improved by 0.34 percentage points to 11.14% [2] - In Q3 2024, the gross margin and net profit margin were 29.88% and 11.57%, respectively, representing year-on-year increases of 4.73 and 6.52 percentage points [2] Valuation Metrics - The company's P/E ratio is projected to be 63.5x in 2024, decreasing to 35.4x by 2026, while the P/B ratio is expected to remain stable at around 3.2x to 3.5x [1][8] - EPS for 2024 is forecasted to be RMB 0.69, increasing to RMB 1.23 by 2026 [1][8] Industry and Market Context - The company operates in the electronics industry, with a focus on communication and automotive connectors [1] - The recovery in communication market demand and the increasing adoption of AI servers are driving growth opportunities for the company [2] - The company's market capitalization as of October 23, 2024, was RMB 6.04168 billion, with a total share capital of 138.73 million shares [1]