Bestechnic (Shanghai) (688608)2024-10-29 02:23Investment Rating - The report maintains a rating of "Add" for the company [4]. Core Views - The wearable and smart home market is experiencing growth, with the company achieving a record high revenue of 9.42 billion yuan in Q3 2024, representing a year-on-year increase of 44.01% and a quarter-on-quarter increase of 7.23% [5][6]. - The company's revenue for the first three quarters of 2024 reached 24.73 billion yuan, up 58.12% year-on-year, with a net profit of 2.89 billion yuan, reflecting a significant year-on-year growth of 145.47% [5]. - The gross margin improved to 33.76% for the first three quarters of 2024, with Q3 gross margin at 34.68%, showing a year-on-year increase of 0.21 percentage points [5]. - The company is benefiting from cost scale effects, with operating expenses growing at a slower rate than revenue, leading to a decrease in expense ratios [5]. - The TWS earphone market is recovering, with a 12.6% year-on-year increase in TWS shipments in Q2 2024, and the company’s 2800 series chips are being used in high-value products like Samsung's Galaxy Buds3 Pro [5]. - The smart watch segment is also showing growth, with the company’s solutions supporting various functionalities and increasing market share among major Android manufacturers [5]. - New product lines, including the 2800 series chips for smart glasses and Wi-Fi 6 connectivity chips, are expected to drive long-term growth [5]. Summary by Sections Financial Performance - For Q3 2024, the company reported total revenue of 9.42 billion yuan, a record high, with a net profit of 1.41 billion yuan, marking a year-on-year increase of 106.45% [5]. - The first three quarters of 2024 saw total revenue of 24.73 billion yuan and a net profit of 2.89 billion yuan, with respective year-on-year growth rates of 58.12% and 145.47% [5]. - The gross margin for the first three quarters was 33.76%, with Q3 gross margin at 34.68%, reflecting improvements in profitability [5]. Market Trends - The wearable and smart home markets are experiencing increased demand, contributing to the company's revenue growth [5]. - The TWS earphone market is recovering, with significant growth in shipments and the introduction of AI-integrated products [5]. - The smart watch segment is expanding, with the company’s products gaining traction among major manufacturers [5]. Future Outlook - The company has adjusted its earnings forecasts, projecting revenues of 35.51 billion yuan, 51.90 billion yuan, and 68.20 billion yuan for 2024, 2025, and 2026 respectively, with corresponding net profits of 4.29 billion yuan, 6.77 billion yuan, and 9.82 billion yuan [5][6]. - The introduction of new product lines, including smart glasses and Wi-Fi 6 chips, is expected to support long-term growth [5].