NNCC(SH:600435) Soochow Securities·2024-10-25 10:01Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a significant decline in revenue and profit for the first three quarters of 2024, with total revenue of 796 million yuan, down 66.80% year-on-year, and a net profit attributable to shareholders of -73.75 million yuan, down 139.88% year-on-year. However, there is an expectation of recovery in performance as downstream orders gradually resume towards the end of the year [1][2] - Despite the pressure on performance, the company continues to increase R&D investment, with R&D expenses reaching 165 million yuan in the first three quarters of 2024, an increase of 7.10% year-on-year [1] - The company is positioned as a leading enterprise in the guided control platform sector in China, and with the release of long-range fire orders in the second half of the year, operational conditions are expected to improve significantly [2] Financial Performance Summary - For the first three quarters of 2024, the company achieved total revenue of 796 million yuan, a decrease of 66.80% year-on-year, and a net profit of -73.75 million yuan, a decrease of 139.88% year-on-year. In Q3 alone, revenue was 503 million yuan, down 25.58% year-on-year, with a net profit of 465,900 yuan, down 98.77% year-on-year [1] - The company’s cash flow situation is tight, with operating cash flow decreasing by 53.05% year-on-year to -1.098 billion yuan, while investment cash flow increased significantly by 259.17% year-on-year to 241 million yuan [2] - As of Q3 2024, total assets amounted to 6.357 billion yuan, a decrease of 9.60% year-on-year, while total liabilities decreased by 16.36% to 3.029 billion yuan, indicating a continuous optimization of the capital structure [2] Earnings Forecast and Valuation - The company’s earnings are expected to recover, with projected net profits for 2024, 2025, and 2026 being 203 million yuan, 303 million yuan, and 412 million yuan respectively, corresponding to P/E ratios of 83, 56, and 41 times [2] - The report maintains previous forecasts, indicating confidence in the company's recovery and growth potential in the coming years [2]