Runjian (002929) 中国银河·2024-11-07 05:49Investment Rating - The report maintains a "Recommended" rating for the company, with a projected EPS of 1.29, 1.61, and 2.03 CNY for 2024, 2025, and 2026 respectively, corresponding to PE ratios of 23.8x, 19.1x, and 15.1x [4][6]. Core Insights - The company has faced short-term pressure on performance, with a revenue decline of 3% year-on-year to 6.548 billion CNY and a net profit drop of 27.6% to 290 million CNY for the first three quarters of 2024. However, cash flow has improved compared to the previous year [2][4]. - The company is experiencing rapid growth in its computing network business, while the telecommunications network business remains stable. The digital network and energy network segments are relatively weak [2][3]. - The company has a strong order backlog and has been actively winning significant projects in various provinces, enhancing its competitive advantage [3]. Financial Performance Summary - For Q1-Q3 2024, the company reported a gross margin of 16.1%, down 2.6 percentage points year-on-year, and a net profit margin of 4%, down 1.7 percentage points [2]. - The company’s operating cash flow rate improved significantly to 81.3%, up 14.6 percentage points year-on-year, indicating a reduction in concerns regarding receivables [2][4]. - The Q3 2024 results showed a revenue of 2.124 billion CNY, a decrease of 1.6% quarter-on-quarter, and a net profit of 54 million CNY, down 53.4% quarter-on-quarter [2][4]. Research and Development - The company increased its R&D expenses by 2.2% to 273 million CNY, with an R&D expense ratio of 4.5%, up 0.5 percentage points [3]. - The company is focusing on enhancing its capabilities in computing cluster technology and has established significant projects in supercomputing and AI data management [3]. Future Projections - The company’s projected net profits for 2024, 2025, and 2026 are 363 million CNY, 453 million CNY, and 572 million CNY respectively, with corresponding revenue growth rates of 0.44%, 18.54%, and 20.68% [5][4]. - The report anticipates a gradual recovery in the company's performance in the medium to long term despite current challenges [4].