Shanghai Liangxin Electrical (002706) 华福证券·2024-10-29 07:01Investment Rating - The report maintains a "Buy" rating for Liangxin Co Ltd (002706 SZ) [6] Core Views - The company faces short-term pressure from downstream demand but continues to invest for long-term growth [1] - Revenue and profits declined in the first three quarters of 2024, with Q3 showing significant year-over-year drops [1] - The company maintains its "Two Intelligence and One New" strategy, focusing on end-to-end customer service and new product development [1] Financial Performance - Q1-Q3 2024 revenue reached 3 12 billion yuan (-9 6% YoY), with net profit attributable to parent company of 310 million yuan (-25 0% YoY) [1] - Q3 2024 revenue was 1 11 billion yuan (-6 1% YoY), with net profit attributable to parent company of 70 million yuan (-46 8% YoY) [1] - Gross margin for Q1-Q3 2024 was 31 32% (-2 25pct YoY), while Q3 gross margin was 29 64% (-4 38pct YoY) [1] Market Segments - In the new energy sector, the company holds over 40% market share in low-voltage electrical appliances, supporting over 200GW of new energy power generation equipment [2] - The smart building sector faces challenges with domestic building completion area down 24 4% YoY in Jan-Sep 2024 [2] - The company has successfully implemented its low-voltage electrical products in data centers in Hohhot and Harbin [2] Share Repurchase - As of October 10, 2024, the company has repurchased 22 47 million shares (2% of total shares) at an average price of 6 16 yuan per share [3] Financial Projections - Revenue is projected to reach 4 20/4 87/5 70 billion yuan in 2024/2025/2026, down from previous estimates of 5 08/6 01/7 40 billion yuan [3] - Net profit attributable to parent company is expected to be 380/460/560 million yuan in 2024/2025/2026, down from previous estimates of 500/610/780 million yuan [3] Valuation - The stock trades at 21/17/14 times PE for 2024/2025/2026 [3] - Current price-to-book ratio is 1 9x, with a closing price of 7 08 yuan as of October 28, 2024 [6]