Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 68.31 [1][7]. Core Views - The defense business is showing signs of recovery, and the company is expected to achieve growth in revenue and profit for the full year despite a decline in the first three quarters due to industry factors [3][4]. - The company has established a strategic partnership with Luoyang Guanglian Fund, which is expected to enhance future capital operations [6]. - Financial indicators remain healthy, with a slight decline in gross margin but significant improvement in operating cash flow [5]. Summary by Sections Financial Performance - In Q3, the company achieved revenue of RMB 4.898 billion, a year-on-year increase of 6.45% but a quarter-on-quarter decrease of 5.52%. For the first three quarters of 2024, revenue totaled RMB 14.095 billion, down 8.23% year-on-year, with a net profit of RMB 2.513 billion, down 13.15% year-on-year [3][4]. - The gross margin for the first three quarters of 2024 was 36.61%, with a slight decline of 0.59 percentage points compared to the first half of the year [5]. Market Position and Strategy - The company is a leading player in the domestic connector industry and is leveraging its industry advantages to provide better investment opportunities for the Luoyang Guanglian Fund [6]. - The company has seen strong growth in sectors such as data centers, new energy equipment, industrial equipment, and medical devices, which are expected to support overall performance [4]. Profit Forecast and Valuation - The forecast for net profit attributable to shareholders for 2024-2026 is RMB 3.618 billion, RMB 4.392 billion, and RMB 5.186 billion, respectively, with corresponding EPS of RMB 1.71, RMB 2.07, and RMB 2.45 [7][8]. - The company is valued at a PE ratio of 33 times for 2025, leading to a target price of RMB 68.31 [7].
中航光电(002179):防务业务持续恢复,全年增长可期