ECC(600850) INDUSTRIAL SECURITIES·2024-11-24 02:42Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance in the near term [4]. Core Insights - The company has demonstrated steady revenue growth, with a notable increase in specific business segments. Digital product revenue grew by 31% year-on-year, while the smart application software business saw a remarkable 53% increase [3][4]. - The company’s new contract value in the Xinchuang (信创) business reached 2.833 billion yuan, marking a 59% year-on-year increase, indicating strong demand and market position [3]. - The financial performance for Q1-Q3 2024 shows a revenue of 7.1 billion yuan, up 2.49% year-on-year, and a net profit attributable to shareholders of 302 million yuan, up 8.76% year-on-year [3][4]. Financial Summary - Revenue Forecast: Projected revenues for 2024, 2025, and 2026 are 10,944 million yuan, 11,934 million yuan, and 12,974 million yuan respectively, reflecting a compound annual growth rate (CAGR) of approximately 9.4% [2]. - Net Profit Forecast: Expected net profits for the same years are 562 million yuan, 634 million yuan, and 710 million yuan, with growth rates of 13.1%, 12.8%, and 12.0% respectively [2]. - Profitability Metrics: The gross margin is expected to improve from 20.3% in 2023 to 21.9% by 2026, while the return on equity (ROE) is projected to increase from 11.0% to 12.7% over the same period [2][4]. - Earnings Per Share (EPS): EPS is forecasted to rise from 0.73 yuan in 2023 to 1.04 yuan by 2026, indicating strong earnings growth potential [2][4].