LY iTECH(SZ:002600) Soochow Securities·2024-11-04 09:16Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company has shown a significant recovery in Q3 performance, with a revenue increase of 32% year-on-year and a net profit increase of 15% year-on-year [2][4] - The company is strategically positioned in the AI terminal manufacturing sector, which is expected to drive long-term growth despite some short-term profit margin pressures due to product mix changes [2][3] - The company is benefiting from increased demand from major North American clients and is expected to continue this positive trend into Q4 [4] Financial Performance Summary - Total revenue for the first three quarters reached 314.9 billion, up 28% year-on-year, while net profit was 14.1 billion, down 25% year-on-year [2] - Q3 revenue was 123.7 billion, with a year-on-year increase of 32% and a quarter-on-quarter increase of 32% [2] - The company’s gross margin has slightly declined due to changes in product structure and foreign exchange losses impacting revenue [2][3] - The forecast for net profit for 2024-2026 has been adjusted downwards, with expected figures of 20 billion, 28 billion, and 37 billion respectively [4] Market Position and Outlook - The company is positioned to become a core supplier of thermal management components for AI hardware, with existing capabilities in various cooling solutions [3] - The traditional product lines are expected to see increased market share, supported by new product launches in the Android supply chain [4] - The overall market demand is anticipated to resonate positively with the company's product offerings, leading to sustained performance in Q4 [4]