Hundsun(SH:600570) Ping An Securities·2024-11-01 01:00Investment Rating - The report maintains a "Strong Buy" rating for the company, indicating an expected stock performance that will exceed the market by more than 20% within the next six months [1][14]. Core Views - The company's revenue continues to face pressure, but the decline in profit margins has narrowed. For the first three quarters of 2024, the company reported revenue of 4.188 billion yuan, a year-on-year decrease of 4.12%, and a net profit attributable to shareholders of 446 million yuan, down 26.57% year-on-year [3][4]. - The gross profit margin has decreased to 69.31%, down 2.58 percentage points from the previous year, while the net profit margin has declined by 3.25 percentage points to 10.64% [4]. - The company is solidifying its leading position in financial IT, with ongoing enhancements in its capabilities in the fields of "Xinchuang" (domestic innovation) and AI technologies [4][6]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 4.188 billion yuan, a decrease of 4.12% year-on-year. The third quarter alone saw a revenue of 1.352 billion yuan, down 12.26% year-on-year [3][4]. - The wealth technology service revenue was 803 million yuan, down 20.32% year-on-year, which was the main factor for the revenue decline. However, the company saw a 16.74% increase in revenue from corporate finance, insurance core, and financial infrastructure technology services, totaling 470 million yuan [4]. Profitability Metrics - The company’s gross profit margin for the first three quarters of 2024 was 69.31%, a decline of 2.58 percentage points year-on-year. The net profit margin was 10.64%, down 3.25 percentage points from the previous year [4][5]. - The report projects net profits for 2024-2026 to be 1.513 billion yuan, 1.767 billion yuan, and 2.133 billion yuan respectively, with corresponding EPS of 0.80 yuan, 0.93 yuan, and 1.13 yuan [7]. Market Position and Future Outlook - The company has established strategic partnerships with key domestic firms and research institutions, enhancing its competitive edge in the Xinchuang and AI sectors [4][6]. - The company ranks 22nd in the 2024 IDC FinTech Rankings, making it the highest-ranked Asian company in the list, indicating a strong market position [6]. - The report emphasizes the management's confidence in the company's long-term development, as evidenced by the stock incentive plan [7].