UE(SH:603600) GOLDEN SUN SECURITIES·2024-10-27 04:11Investment Rating - The report maintains a "Buy" rating for the company [2][4]. Core Views - The company reported a revenue of 1.338 billion yuan in Q3 2024, representing a year-on-year increase of 38.8%. The net profit attributable to shareholders reached 98 million yuan, up 42.3% year-on-year, and the non-recurring net profit also stood at 98 million yuan, reflecting a 36.9% increase year-on-year [1]. - The growth in revenue is attributed to the expansion of new customers, products, and channels, achieving a record high for quarterly revenue. Profitability is improving steadily due to optimized expense ratios [1]. - The company is accelerating its overseas ODM (Original Design Manufacturer) business, with stable demand from major clients like Costco and Sam's Club, contributing significantly to business growth. Most U.S. orders are now shipped from Vietnam, enhancing efficiency and mitigating tariff impacts [1]. - Domestic sales continue to grow significantly, supported by a multi-channel expansion strategy and the successful launch of new products like Flow360, which has increased both revenue and brand recognition [1]. - The gross margin for Q3 2024 was 22.4%, slightly down by 0.6 percentage points year-on-year, while the net profit margin improved to 7.4%, up 0.2 percentage points year-on-year, indicating a steady enhancement in profitability despite some pressure on gross margins due to the rising share of new business [1]. Financial Summary - The company’s net operating cash flow for Q3 2024 was 70 million yuan, a decrease of 8 million yuan year-on-year. The turnover days for accounts receivable, accounts payable, and inventory were 50.46, 67.34, and 48.06 days respectively [2]. - The forecast for net profit attributable to shareholders for 2024-2026 is 320 million, 410 million, and 510 million yuan, corresponding to PE ratios of 12.2X, 9.5X, and 7.7X respectively [2][3].