T&S(300570) 海通国际·2024-11-14 09:42Investment Rating - The report assigns an "Outperform" rating to the company with a target price of RMB 86.50 based on a 2025 PE of 50X [3][14] Core Views - The company achieved record-high quarterly revenue in Q3 2024, driven by increased customer orders [1][2] - Revenue for Q1-Q3 2024 reached RMB 916 million, up 47% YoY, with net profit attributable to shareholders of RMB 146 million, up 39.09% YoY [1] - Q3 2024 revenue was RMB 406 million, up 74.52% YoY and 41.69% QoQ, with net profit of RMB 66.29 million, up 99.90% YoY [1] - Gross margin improved significantly to 36.23% in Q3 2024, up 8.72 pcts YoY and 3.68 pcts QoQ [1] - The company is advancing R&D and production of high-speed active products, benefiting from AI computing and 5G construction demand [2][3] Financial Performance - For 2024-2026, revenue is forecasted to be RMB 1.41 billion, 2.11 billion, and 2.83 billion respectively, with net profit of RMB 250 million, 393 million, and 544 million [3] - EPS is projected to be RMB 1.10, 1.73, and 2.39 for 2024-2026 [3] - Gross margin is expected to stabilize around 33.8% from 2024-2026 [4][6] - ROE is forecasted to increase from 16.9% in 2024 to 23.6% in 2026 [4] Business Segments - The optical devices segment is the main revenue driver, expected to grow from RMB 1.33 billion in 2024 to RMB 2.69 billion in 2026 [6] - Optical fiber sensing business is projected to maintain stable revenue at around RMB 3.44 million from 2024-2026 [6] - Other main businesses are forecasted to grow from RMB 79.39 million in 2024 to RMB 133.38 million in 2026 [6] R&D and Operations - R&D expenses in Q3 2024 were RMB 23.65 million, up 57.55% YoY, with R&D expense ratio of 5.82% [2] - Inventory increased 22.80% YoY to RMB 273 million at the end of Q3 2024, mainly due to increased sales orders [2] - Operating cash flow in Q3 2024 was RMB 29.82 million, down 31.32% YoY [2] Industry Position - The company is one of the largest global manufacturers of dense connectivity products [3] - It is a leading enterprise in China's ceramic ferrule industry and a major supplier of MPO/MTP optical connectors [7] - The company has a complete R&D system and holds various patents in the optical communication field [7]