Topsec(SZ:002212) Guotai Junan Securities·2024-10-27 12:20Investment Rating - The report maintains a "Buy" rating and lowers the target price to 8.26 CNY, down by 5.63% [3][4]. Core Views - The company's overall performance meets market expectations, with a significant reduction in losses in the first three quarters of 2024, achieving profitability in Q3. The effective cost control measures have contributed to this turnaround, and the company is expected to have a positive long-term growth outlook due to continuous innovation across multiple fields [2][3]. Summary by Sections Financial Performance - In the first three quarters of 2024, the company achieved revenue of 1.582 billion CNY, a year-over-year decrease of 3.98%, with a net loss of 169 million CNY, which is a 31.83% improvement compared to the previous year. In Q3 alone, the company reported revenue of 709 million CNY, a year-over-year increase of 10.21%, and a net profit of 36 million CNY, reflecting a year-over-year increase of 200.73% [3][12]. Cost Control and Efficiency - The company has effectively reduced total expenses by 10.15% year-over-year in Q3 2024, and by 5.26% in the first three quarters. R&D expenses decreased by 8.05%, while management expenses saw a significant drop of 24.18%. The sales expenses increased by 3.56%, indicating a balanced approach to maintaining marketing investments while controlling costs [3][12]. Innovation and Market Response - The company is enhancing its technological innovation capabilities to quickly respond to new market demands. It has upgraded its hardware platform capabilities and launched a heterogeneous hardware platform supporting both NVIDIA and domestic GPUs. The newly released Tianwen large model system aims to provide automated assessments for various security scenarios [3][12]. Earnings Forecast - The company is projected to achieve revenues of 3.378 billion CNY in 2024, 3.853 billion CNY in 2025, and 4.357 billion CNY in 2026. The expected net profits for the same years are 205 million CNY, 296 million CNY, and 383 million CNY, respectively, with EPS of 0.17 CNY, 0.25 CNY, and 0.33 CNY [3][13]. Valuation - The report employs both PE and PS valuation methods, assigning a PE of 32.90 for 2025 based on comparable companies, leading to a reasonable market value of 9.739 billion CNY. The PS valuation method suggests a conservative estimate of 10.017 billion CNY, resulting in a target price of 8.26 CNY [3][15][18].