Loongson Technology(688047) 东兴证券·2024-11-04 11:00Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook based on expected performance relative to market benchmarks [3]. Core Insights - The company's performance aligns with expectations, showing signs of stabilization and recovery in its information technology business. The third quarter saw a revenue increase of 2.05% year-on-year, while losses narrowed [2][3]. - The information technology chip segment has shown significant growth, with a revenue increase of 16.70% year-on-year in Q3, driven by recovering demand in the downstream market and continuous product iterations [2][3]. - The company is focusing on enhancing its core product competitiveness and is expected to benefit from the ongoing recovery in the domestic market and the deepening of domestic substitution policies [3]. Financial Performance Summary - For the first three quarters of 2024, the company reported a total revenue of 308 million yuan, a decrease of 21.94% year-on-year, and a net loss attributable to shareholders of 343 million yuan, an increase in loss of 65.67% [1]. - In Q3 alone, the company achieved a revenue of 88 million yuan, marking a 2.05% increase year-on-year, with a net loss of 105 million yuan, which is a 1.47% increase in loss compared to the previous year [1][2]. - The projected net profits for 2024-2026 are expected to be -196.48 million yuan, 7.06 million yuan, and 87.45 million yuan, respectively, with corresponding EPS of -0.49, 0.02, and 0.22 yuan [3][5]. Business Segment Analysis - The information technology chip revenue for the first three quarters reached 142 million yuan, a substantial increase of 114.18% year-on-year, attributed to the recovery in demand and product improvements [3]. - The industrial control sector faced temporary setbacks due to halted purchases from key clients in the security application area, but new market opportunities in sectors like energy and transportation are emerging [3]. Market Position and Future Outlook - The company is committed to building a self-controlled ecosystem and enhancing the competitiveness of its main products. With the recovery of the information technology market and the deepening of domestic substitution trends, the company's performance is expected to stabilize and improve [3].