MTM(SH:688029) SINOLINK SECURITIES·2024-10-30 08:16Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company achieved stable revenue growth in Q3 2024, with a total revenue of 2.012 billion RMB, representing a year-on-year increase of 15%. The net profit attributable to shareholders reached 451 million RMB, up 17% year-on-year [1] - The gross margin improved significantly to 67.1%, an increase of 2.4 percentage points year-on-year, attributed to the scale effect of new products and cost reduction efforts [1] - The company is expanding its overseas market presence, with a new production base in Thailand expected to be operational by 2026, aimed at enhancing the global supply chain and expanding into Southeast Asia [1] - The company has increased its marketing and R&D expenditures, with sales expenses reaching 162 million RMB (up 25% year-on-year) and R&D expenses at 41.99 million RMB (up 24% year-on-year) [1] - The acquisition of UK-based CME is expected to enhance the company's market presence in Europe and complement its sales channels [1] Summary by Sections Performance Overview - For the first three quarters of 2024, the company reported revenues of 2.012 billion RMB, a 15% increase year-on-year, and a net profit of 451 million RMB, up 17% year-on-year. In Q3 alone, revenues were 679 million RMB, with a net profit of 141 million RMB, reflecting a 13% and 15% increase year-on-year, respectively [1] Operational Analysis - The gross margin for Q3 reached 67.1%, a 2.4 percentage point increase year-on-year, driven by new product scale effects and successful cost reduction initiatives. The new domestic production base completed in May 2024 is expected to further enhance production efficiency [1] - The company is actively increasing its marketing and R&D investments, with significant growth in both areas, indicating a commitment to strengthening its global brand presence [1] M&A Activity - The company announced the acquisition of 51% of Creo Medical S.L.U. for up to 36.72 million euros, which focuses on minimally invasive surgical equipment. This acquisition is expected to positively impact the company's performance and enhance its sales in Europe [1] Profit Forecast and Valuation - The company is projected to achieve net profits of 611 million RMB, 789 million RMB, and 970 million RMB for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 26%, 29%, and 23%. The current price corresponds to a PE ratio of 22, 17, and 14 for the respective years [1]