CFMEE(SH:688630) Huafu Securities·2024-10-27 08:10Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the market benchmark within the next six months [19]. Core Views - The company's performance in Q1-Q3 2024 met expectations, with revenue of 718 million and a year-on-year growth of 37.05%. The net profit attributable to shareholders reached 155 million, up 30.94% year-on-year, while the non-recurring net profit grew by 51.75% to 148 million [1][4]. - The significant growth in non-recurring profit is attributed to a reduction in government subsidies, which impacted Q3 profits. The government subsidy accounted for 5.09 million in Q3 2024, compared to 18.44 million in Q3 2023, resulting in a substantial difference of 13.35 million [1]. - The company experienced a rapid increase in inventory, amounting to 513 million at the end of Q3 2024, a 39% year-on-year increase, suggesting strong order fulfillment. Q4 is anticipated to be a peak revenue recognition period, particularly for overseas sales [2]. - The company has multiple growth drivers, including advancements in PCB technology driven by AI, which positions its products at a global leading level. The demand for PCB equipment is expected to rise due to increased capital expenditure and technological upgrades in the industry [3]. - The report forecasts revenue for 2024-2026 to be 1.15 billion, 1.56 billion, and 1.99 billion respectively, with net profits projected at 267 million, 386 million, and 524 million. The P/E ratios are expected to be 29, 20, and 15 times respectively [4][11]. Summary by Sections Financial Performance - For Q3 2024, the company reported revenue of 268 million, a year-on-year increase of 30.87% and a quarter-on-quarter increase of 6.80%. The net profit for Q3 was 54 million, up 18.85% year-on-year, while the non-recurring net profit surged by 77.07% to 49 million [1][2]. Growth Potential - The company is set to benefit from the high-end demand in the PCB sector, with its products expected to capture a significant market share in advanced packaging technologies over the next three years [3]. - The report highlights the company's strategic focus on market expansion, high-end product development, and diversification of product categories as key factors driving growth [3]. Earnings Forecast - The earnings forecast remains unchanged, with projected revenues and net profits indicating robust growth rates of 39% in 2024 and 49% in 2025 for net profits [4][14].