Tricolor(603516) 浙商证券·2024-11-13 10:23Investment Rating - The report assigns a "Buy" rating to the company, with a target price of ¥35.22 as of November 12, 2024 [5][7] Core Views - The company is a leading provider of professional audio-visual control equipment and solutions, with its traditional business reaching an industry inflection point [1] - The company has developed its own ASIC chips, which are expected to further enhance its competitive advantage [1] - The company has partnered with a global AI leader (referred to as "N company") and has started generating revenue from this collaboration, which is expected to create a second growth curve [1] - The company is expected to achieve revenues of ¥655 million, ¥874 million, and ¥1.22 billion in 2024, 2025, and 2026, respectively, with net profits of ¥107 million, ¥153 million, and ¥233 million, representing YoY growth of 514%, 42%, and 52% [5] Industry Analysis - The professional audio-visual industry is benefiting from technological advancements such as ultra-high-definition (4K/8K) and 5G, which are expanding application scenarios [2] - The global professional audio-visual systems market is projected to reach $363.27 billion by 2029, with a CAGR of 5.0% from 2022 to 2029 [2] - The domestic market is also growing rapidly, with Chinese manufacturers gaining market share due to technological advancements and policy support [2][38] Company Highlights Self-developed ASIC Chips - The company has successfully developed and launched three proprietary ASIC chips, which are expected to enhance its technological leadership and improve product gross margins [4][54] - The chips are designed to address key bottlenecks in the industry and are expected to strengthen the company's market competitiveness [4] Expansion into XR and AI - The company has developed products such as the Pandora immersive interactive entertainment system and Xshadow AR projection control system, positioning itself to capitalize on the growing XR market [4][72] - The company has partnered with a global AI leader (N company) and has started supplying products such as liquid cooling test platforms and AI-based testing platforms, with AI-related revenue reaching ¥15 million in H1 2024 [4][78] Emergency Communication and Defense Industry - The company's products are widely used in emergency management command centers and are expected to benefit from increased government spending on disaster prevention and mitigation [3][65] - The company is also expected to benefit from the recovery of the defense industry, with China's defense budget increasing by 7.2% in 2024 [3][67] Financial Projections - The company is expected to achieve significant revenue and profit growth over the next three years, driven by its core business, new product launches, and partnerships in AI and XR [5][86] - The company's revenue is projected to grow at a CAGR of 31.25%, 33.49%, and 39.56% from 2024 to 2026, with net profit margins improving significantly [5][86]