GONGJIN(SH:603118)2024-11-07 05:48Investment Rating - The report maintains a "Recommended" rating for the company [1]. Core Views - The company's financial performance showed signs of stabilization and recovery in Q3 2024, with a significant increase in net profit compared to the previous quarter [5]. - The company is expected to see a broad outlook for its data communication business, despite cyclical challenges in its network communication segment [4]. - The company has expanded its production capacity and accelerated R&D efforts, with a focus on smart manufacturing and new product development [4]. Financial Performance Summary - For the first three quarters of 2024, the company reported revenue of 6.046 billion, a decrease of 9.2% year-on-year, and a net profit of 0.14 billion, down 92.4% [1]. - In Q3 2024, the company achieved revenue of 2.055 billion, a decrease of 10.8% year-on-year, but a net profit of 0.3 billion, marking a 234.6% increase from the previous quarter [5]. - The gross profit margin for Q3 2024 was 12.5%, an increase of 1.9 percentage points year-on-year [5]. Business Segment Performance - The network communication business saw positive growth in PON series products, while AP and DSL series products experienced slight declines due to market demand issues [5]. - The data communication business showed an increase in sales, particularly in CM mode products, and the automotive electronics segment achieved over 1.3 billion in revenue, doubling year-on-year [5][6]. - The company is introducing new products such as 10GPON+Wi-Fi7 and has made significant progress in automotive electronics, including laser radar and millimeter-wave radar technologies [6]. Future Financial Projections - The company forecasts net profits of 0.51 billion, 1.09 billion, and 1.75 billion for 2024, 2025, and 2026 respectively, with corresponding EPS of 0.06, 0.14, and 0.22 [4]. - The current stock price corresponds to a PE ratio of 129.1x for 2024, 59.9x for 2025, and 37.4x for 2026 [4].