XGD(SZ:300130) Tai Ping Yang·2024-11-05 12:18Investment Rating - The report maintains a "Buy" rating for the company, with a target price based on the last closing price of 24.93 [1][4]. Core Insights - The company's gross margin has significantly improved, reaching 41.99%, an increase of 5.25 percentage points year-on-year. However, net profit has decreased due to tax adjustments amounting to 3.62 billion yuan, impacting the net profit attributable to shareholders by 325.02 million yuan [3][4]. - The company has launched a new payment feature in collaboration with Alipay called "Tap to Pay," which allows users to complete payments by tapping their mobile devices [3]. - The company is expanding its AI business, having established a new entity focused on AI solutions, with its first product, a "digital employee," already in the commercialization phase [3]. Financial Summary - For the fiscal year 2024, the company expects revenues of 36.11 billion yuan, a decrease of 5% from the previous year, with projected earnings per share (EPS) of 1.01 yuan [5][7]. - The net profit for 2024 is forecasted to be 560.57 million yuan, reflecting a decline of 25.76% compared to the previous year [5][7]. - The company anticipates a recovery in revenue growth starting in 2025, with an expected increase of 16% and a further 17% in 2026 [5]. Performance Metrics - The report highlights a significant increase in gross margin, projected to stabilize around 42% in the coming years [11]. - The return on equity (ROE) is expected to improve from 12.33% in 2024 to 21.11% by 2026, indicating enhanced profitability [11]. - The company’s price-to-earnings (PE) ratio is projected to decrease from 25 in 2024 to 11 in 2026, suggesting a more attractive valuation over time [11].