YOFC(601869) Tianfeng Securities·2024-11-03 06:07Investment Rating - The report maintains a "Buy" rating for the company, with a target price set at 26.92 CNY per share, indicating a potential upside based on expected market performance [7]. Core Views - The company has shown signs of recovery in its third-quarter performance, with a year-on-year revenue decrease of 13% for the first three quarters, but a 7.5% year-on-year increase in revenue for the third quarter [1]. - The demand for optical cables in China is expected to recover in 2025, with a projected growth rate of 2.3%, while global demand is anticipated to grow at 6.2% [2]. - The company is making progress in developing new optical fiber products, including G.654.E fiber and hollow-core fibers, which are expected to enhance performance in various applications [3]. - The planned acquisition of a 30% stake in Baosheng Ocean Engineering Cable is expected to strengthen the company's position in the marine engineering sector and enhance synergies with existing cable products [4]. Financial Performance Summary - For the first three quarters of 2024, the company reported a total revenue of 8.694 billion CNY, a 13% decrease year-on-year, and a net profit of 573 million CNY, down 35% year-on-year [1]. - The third quarter alone saw a revenue of 3.346 billion CNY, marking a 7.5% increase year-on-year and a 13% increase quarter-on-quarter [1]. - The company has revised its profit forecasts upwards, expecting net profits of 854 million CNY, 1.035 billion CNY, and 1.250 billion CNY for 2024, 2025, and 2026 respectively [5]. Market Outlook - The report highlights a potential recovery in demand for optical cables, particularly for data center applications, which are expected to grow significantly from 5% of total demand in 2024 to 11% by 2029 [2]. - The company is positioned to benefit from the anticipated growth in the optical fiber market, especially with its new product developments and strategic acquisitions [3][4].