WLY(SZ:000858) CSC SECURITIES (HK) LTD·2024-11-01 07:31Investment Rating - The report assigns a "Trading Buy" rating for the company, indicating a potential upside of 5% to 15% [4][9]. Core Views - The company achieved a revenue of RMB 67.92 billion in the first three quarters of 2024, representing an 8.6% year-on-year increase, with a net profit of RMB 24.93 billion, up 9.2% year-on-year [4]. - The third quarter's revenue was RMB 17.27 billion, showing a 1.4% year-on-year increase, but the performance was below expectations [4]. - The gross margin improved by 2.8 percentage points to 76.2% during the reporting period, driven by price increases [4]. - The company plans to maintain a cash dividend payout ratio of no less than 70% of net profit, with a minimum of RMB 20 billion annually, which is expected to enhance shareholder returns [5]. - The company’s contract liabilities at the end of the third quarter stood at RMB 7.07 billion, a decrease of 13.3% from the previous quarter, suggesting a potential recovery in performance for Q4 [6]. Financial Summary - The company’s net profit projections for 2024, 2025, and 2026 are RMB 32.89 billion, RMB 37.14 billion, and RMB 41.57 billion, respectively, with year-on-year growth rates of 8.9%, 12.9%, and 11.91% [6]. - Earnings per share (EPS) are forecasted to be RMB 8.47, RMB 9.57, and RMB 10.71 for the years 2024, 2025, and 2026, respectively [6]. - The price-to-earnings (P/E) ratios for the same years are projected to be 17, 15, and 14 [6].