USC(688403) Great Wall Securities·2024-10-27 09:16Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index within the next six months [9]. Core Views - The company reported a steady growth in revenue for Q3 2024, with a year-on-year increase of 17.23% and a quarter-on-quarter increase of 10.62%. However, the net profit decreased by 31.43% year-on-year due to increased costs associated with ongoing projects and higher financial expenses [1][2]. - The company is actively expanding its production capacity for high-end testing platforms to meet the growing demand in the new display driver chip market, particularly for AMOLED and Micro OLED technologies [2][4]. - The company has initiated a convertible bond issuance plan to raise up to RMB 1.1487 billion for expanding its production capabilities and enhancing its product structure [4]. Financial Performance Summary - For the first three quarters of 2024, the company achieved a revenue of RMB 1.07 billion, a year-on-year growth of 19.52%. The net profit for the same period was RMB 101 million, reflecting a decline of 29.02% [1]. - In Q3 2024, the company reported a revenue of RMB 396 million, with a gross margin of 23.14%, down 6.03 percentage points year-on-year. The net profit for Q3 was RMB 41 million, showing a year-on-year decrease of 31.43% [2][4]. - The company’s R&D investment in H1 2024 was RMB 41.23 million, a year-on-year increase of 10.39%, indicating a commitment to innovation and technology advancement [2]. Future Projections - The company is expected to see a recovery in profitability as the consumer electronics market improves, with projected net profits of RMB 154 million, RMB 229 million, and RMB 296 million for 2024, 2025, and 2026 respectively [4]. - The earnings per share (EPS) are forecasted to be RMB 0.18, RMB 0.27, and RMB 0.35 for the years 2024, 2025, and 2026 respectively [4].