CRM(SH:688396) Orient Securities·2024-11-15 00:32Investment Rating - The report maintains a "Buy" rating for the company with a target price of 64.93 yuan, based on a valuation of 3.87 times the average price-to-book ratio of comparable companies for 2024 [2][4][7]. Core Insights - The company reported a revenue of 2.71 billion yuan in Q3, with year-on-year and quarter-on-quarter growth of 8% and 3% respectively. Gross profit reached 770 million yuan, reflecting an 11% quarter-on-quarter increase, and the gross margin improved by 2.09 percentage points to 28.43%. However, the net profit attributable to the parent company decreased by 21% year-on-year, primarily due to industry conditions [1][7]. - The company is experiencing positive developments across its product lines, particularly in the automotive and AI sectors, which are expected to drive demand growth. The automotive business aims to increase its market share in core applications such as motor control and power devices [1][7]. - The foundry business is benefiting from its unique BCD process technology and a stable customer base, with a steady increase in the sales proportion of high-grade products. The company anticipates improved industry conditions and increased market demand in the coming year [1][7]. Financial Summary - The company's financial performance shows a projected revenue of 10.985 billion yuan for 2024, with an expected growth rate of 11%. The net profit attributable to the parent company is forecasted to be 783 million yuan, reflecting a 47% decline year-on-year. The gross margin is expected to be 27.4% in 2024, with a gradual improvement to 28.8% by 2026 [3][7]. - The earnings per share are projected to be 0.59 yuan in 2024, increasing to 1.02 yuan by 2026. The return on equity is expected to rise from 3.6% in 2024 to 5.7% in 2026 [3][7].