Hwatsing Technology (688120) HTSC·2024-10-31 08:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 224.64 RMB [2][5][7]. Core Insights - The company reported a revenue of 955 million RMB in Q3 2024, representing a year-on-year increase of 57.63% and a quarter-on-quarter increase of 17.00%. The net profit attributable to the parent company was 288 million RMB, up 51.74% year-on-year and 24.97% quarter-on-quarter [1][2]. - For the first three quarters of 2024, the company achieved a total revenue of 2.452 billion RMB, a year-on-year increase of 33.22%, and a net profit of 721 million RMB, up 27.80% year-on-year [1][2]. - The company's gross margin for Q3 2024 was 45.08%, with a net profit margin of 30.2%, indicating continuous improvement in profitability [2]. - The expansion of CMP (Chemical Mechanical Planarization) customer base and the increase in revenue from consumables and maintenance services contributed significantly to the revenue growth [1][2]. Summary by Sections Financial Performance - Q3 2024 revenue: 955 million RMB, YoY +57.63%, QoQ +17.00% [1][2]. - Q3 2024 net profit: 288 million RMB, YoY +51.74%, QoQ +24.97% [1][2]. - First three quarters 2024 revenue: 2.452 billion RMB, YoY +33.22% [1][2]. - First three quarters 2024 net profit: 721 million RMB, YoY +27.80% [1][2]. Business Strategy - The company is focusing on a "Equipment + Service" platform strategy, exploring new opportunities in thinning, cutting, cleaning, and measurement equipment [2]. - The Versatile-GP300 thinning equipment has successfully completed verification, and the company is expanding its product offerings to various semiconductor processes [2]. Valuation - The revenue forecasts for 2024-2026 have been revised upwards to 3.514 billion RMB, 4.794 billion RMB, and 6.206 billion RMB respectively [2]. - Corresponding net profit forecasts are 1.015 billion RMB, 1.363 billion RMB, and 1.707 billion RMB for the same periods [2]. - The report assigns a valuation premium based on the company's platform strategy, with a target price set at 224.64 RMB, reflecting a 39x PE for 2025 [2].