ZHENHUA(000733) 国金证券·2024-10-27 05:30Investment Rating - Maintains a "Buy" rating for Zhenhua Technology (000733 SZ) [1] Core Views - Zhenhua Technology reported a 24Q3 revenue of 1 31 billion yuan (YoY -23 7% QoQ -7 5%) and a net profit attributable to the parent company of 224 million yuan (YoY -57 5% QoQ -29 5%) [1] - The company's performance is under pressure due to insufficient demand for special components and price transmission pressure [1] - Gross margin for 24Q1-Q3 was 49 6% (YoY -11 2pct) and net margin was 17 2% (YoY -16 9pct) [1] - Operating cash flow improved significantly with a 24Q1-Q3 operating cash flow of 1 33 billion yuan (YoY +215 14%) [1] - The company's platform strategy and increased investment in construction projects support long-term growth [1] Financial Performance - 24Q3 gross margin was 47 4% (YoY -9 2pct QoQ -5 7pct) and net margin was 17 1% (YoY -13 6pct QoQ -5 3pct) [1] - Operating cash flow for 24Q3 was 140 million yuan an increase of 250 million yuan compared to the same period last year [12] - Fixed assets at the end of 24Q3 were 1 818 billion yuan (QoQ -2 37%) and construction in progress was 390 million yuan (QoQ +8 70%) [1] Future Projections - Expected net profit attributable to the parent company for 2024-2026 is 1 02 billion 1 22 billion and 1 47 billion yuan respectively with a YoY growth rate of -62 1% +19 7% and +20 5% [1] - The corresponding PE ratios are 27 23 and 19 times [1] Industry and Market Context - The company is a leading platform in the military component sector with performance pressure not altering its development trend [1] - Military component prices may slightly decrease due to bulk procurement and cost control in the military industry chain [13]