donghua test(SZ:300354) Huaan Securities·2024-11-03 10:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a total operating revenue of 354 million yuan for the first three quarters of 2024, representing a year-on-year increase of 15.88%. The total profit reached 106 million yuan, up 20.35% year-on-year, with a net profit attributable to the parent company of 99 million yuan, also up 20.3% year-on-year. However, in Q3 2024, the company achieved revenue of 78 million yuan, a decrease of 25.67%, and a net profit of 25 million yuan, down 33.72% [2] - Profitability improved sequentially, with a significant increase in contract liabilities. The gross margin and net margin for Q3 2024 were 68.47% and 31.22%, respectively, up 3.24 percentage points and 3.97 percentage points from Q2. Compared to Q3 2023, the gross margin increased by 1.47 percentage points, while the net margin decreased by 4.21 percentage points due to increased expenses, with sales expenses rising by 26.73% and R&D expenses by 46.99%. The total contract liabilities for Q1-Q3 2024 amounted to 31 million yuan, a substantial increase of 74% from the end of 2023, mainly due to an increase in customer prepayments [2] - The company's core products have high reliability and are continuously expanding into new application scenarios. The company has focused on the measurement and control industry for many years, with its core sensor products being highly reliable and stable, suitable for various harsh environments. Recent product launches include the DH7955 rugged high-performance motion controller designed for vehicle, aircraft, and shipborne applications. Additionally, the DH59 series data acquisition and analysis system provided strong technical support for the recent satellite launch mission [2] - The long-term development of the company is viewed positively, but the earnings forecast has been adjusted due to macroeconomic impacts. The projected revenues for 2024-2026 are 530 million, 700 million, and 910 million yuan, respectively, with year-on-year growth rates of 40%, 32%, and 30%. The net profit attributable to the parent company is expected to be 150 million, 210 million, and 280 million yuan, with corresponding year-on-year growth rates of 68%, 40%, and 35%. The earnings per share (EPS) for the total share capital is projected to be 1.07, 1.50, and 2.02 yuan, with price-to-earnings (P/E) ratios of 29, 21, and 15 times at the current stock price [2][3][4] Financial Summary - For 2023, the company reported an operating income of 378 million yuan, with a year-on-year growth of 3.0%. The net profit attributable to the parent company was 88 million yuan, down 27.9% year-on-year. The gross margin was 65.5%, and the return on equity (ROE) was 13.9% [3] - The financial projections for 2024 estimate operating income of 529 million yuan, a year-on-year increase of 39.8%, and a net profit of 148 million yuan, with a significant year-on-year growth of 68.4%. The gross margin is expected to be 65.2%, and the ROE is projected to rise to 20.3% [3][4] - By 2026, the company anticipates an operating income of 911 million yuan, with a year-on-year growth of 30.2%, and a net profit of 280 million yuan, reflecting a year-on-year growth of 35.1%. The gross margin is expected to slightly improve to 65.4%, and the ROE is projected to reach 25.6% [3][4]