ECT(300679) Huachuang Securities·2024-10-29 16:36Investment Rating - The report maintains a "Strong Buy" rating for the company, indicating an expectation to outperform the benchmark index by over 20% in the next six months [1][16]. Core Views - The company has shown significant growth in both consumer electronics and automotive sectors, achieving record quarterly revenue [1]. - The automotive connector market is experiencing a trend towards domestic suppliers, with the company steadily increasing its market share [1]. - The flexible circuit board business has turned profitable, with long-term growth potential anticipated [1]. - The gross margin has improved, although profit growth has lagged behind revenue growth due to increased expenses [1]. - The company is projected to achieve net profits of 621 million, 795 million, and 969 million yuan for the years 2024, 2025, and 2026 respectively [2]. Financial Summary - For the first three quarters of 2024, the company reported total revenue of 3.333 billion yuan, a year-on-year increase of 51.16%, and a net profit of 459 million yuan, up 85.36% year-on-year [1]. - In Q3 2024, revenue reached 1.189 billion yuan, reflecting a 41.5% year-on-year growth, while net profit was 151 million yuan, a 23.53% increase year-on-year [1]. - The company's gross margin for Q3 2024 was 33.6%, an increase of 1.11 percentage points from the previous quarter [1]. - The projected revenue for 2024 is 4.31 billion yuan, with a year-on-year growth rate of 37.7% [2]. Market Position - The company has established itself as a key supplier for major domestic automotive manufacturers, including Geely, Great Wall, BYD, and others, benefiting from the rapid growth of the automotive connector industry [1]. - The flexible circuit board segment is expected to see substantial growth due to increased demand from domestic smartphone brands and wearable devices [1]. Valuation - The target price for the company's stock is set at 56.30 yuan, based on a price-to-earnings ratio of 30 times for 2025 [1][3]. - The current stock price is 44.18 yuan, indicating potential upside [3]. Key Financial Metrics - The company’s total revenue is projected to grow from 3.129 billion yuan in 2023 to 4.310 billion yuan in 2024, with a compound annual growth rate of 37.7% [2]. - The net profit is expected to recover from a decline in 2023 to 621 million yuan in 2024, reflecting a growth rate of 74.2% [2]. - The earnings per share (EPS) is projected to increase from 0.84 yuan in 2023 to 1.46 yuan in 2024 [2].