LONGLI(SZ:300752) Huaxin Securities·2024-11-13 09:24Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [1][3]. Core Insights - The company, Longli Technology, has shown significant performance improvement in Q3 2024, with a revenue of 941 million yuan, representing a year-on-year growth of 31.85%. The net profit attributable to shareholders reached 77 million yuan, a staggering increase of 7191.87% year-on-year [1]. - The trend towards ultra-narrow bezels in mobile devices is becoming prominent, with major industry players like Apple, OPPO, and Xiaomi investing in this design direction. This trend is expected to drive demand for the company's backlight display modules, which are essential for achieving such designs [1][2]. Summary by Sections Financial Performance - In Q3 2024, the company achieved a revenue of 321 million yuan, a year-on-year increase of 2.08%, but a slight quarter-on-quarter decline of 0.89%. The net profit attributable to shareholders was 27 million yuan, up 112.18% year-on-year, but down 9.77% quarter-on-quarter. The non-recurring net profit was 23 million yuan, reflecting a year-on-year growth of 222.04% and a quarter-on-quarter decline of 14.22% [1]. - The gross profit margin for Q3 2024 was 18.44%, an increase of 4.69 percentage points year-on-year, while the net profit margin was 8.41%, up 4.37 percentage points year-on-year [1]. Market Position and Technology - Longli Technology is a leader in the backlight display module industry, recognized by major LCD display module companies and Tier 1 manufacturers. The company has developed advanced technologies such as ultra-thin and high-brightness LGP compression module technology and is involved in setting industry standards for Mini-LED backlight components [2]. - The company has diversified its product applications to include automotive displays, tablets, laptops, televisions, monitors, and smart wearables, with significant clients including Huawei, Xiaomi, vivo, OPPO, and Samsung [2]. Earnings Forecast - The company is projected to generate revenues of 1.311 billion yuan in 2024, 1.986 billion yuan in 2025, and 2.411 billion yuan in 2026. The earnings per share (EPS) are expected to be 0.44 yuan in 2024, 1.10 yuan in 2025, and 1.78 yuan in 2026. The current stock price corresponds to price-to-earnings (PE) ratios of 45.2, 18.1, and 11.2 for the respective years [3][5].