CHINA SATCOM(601698) Minsheng Securities·2024-11-01 10:32Investment Rating - The investment rating for the company is adjusted to "Cautious Recommendation" [4] Core Views - The company's performance in the first three quarters of 2024 met market expectations, with revenue of 1.76 billion yuan, a year-on-year decrease of 5.6%, and a net profit attributable to shareholders of 480 million yuan, a year-on-year increase of 18.4% [2] - The decline in net profit was primarily due to reduced overseas business income and decreased compensation for the amortization of C-band satellite transponders [2] - The company is focusing on its core satellite communication operations while actively expanding into new fields such as aviation and maritime [2][3] Financial Performance Summary - For Q3 2024, revenue was 610 million yuan, down 4.2% year-on-year, with a net profit of 70 million yuan, down 46.8% year-on-year [2] - The gross margin for Q3 2024 was 29.1%, a decrease of 5.22 percentage points year-on-year, while the net margin was 15.5%, a decrease of 12.93 percentage points year-on-year [2] - The comprehensive gross margin for the first three quarters of 2024 decreased by 5.24 percentage points to 29.5%, while the net margin increased by 3.66 percentage points to 31.7% due to improved cost control [2] Expense Management and R&D Investment - The expense ratio for the first three quarters of 2024 was 3.7%, a decrease of 2.08 percentage points year-on-year [2] - R&D expenses increased by 7.9% year-on-year to 50 million yuan, with the R&D expense ratio rising to 2.7% [2] - The company has a strong cash position with 6.13 billion yuan in cash as of Q3 2024, although it decreased by 15.3% from the beginning of the year [2] Market Position and Future Outlook - The company is a leading satellite communication operator in China and the second largest in Asia, benefiting from the accelerated deployment of satellite internet in the domestic market [2] - The forecast for net profit attributable to shareholders for 2024-2026 is adjusted to 625 million yuan, 543 million yuan, and 587 million yuan, respectively, with corresponding PE ratios of 112x, 129x, and 119x [2][3]