ThunderSoft(SZ:300496) Southwest Securities·2024-03-25 16:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 71.50 CNY over the next six months [1][3]. Core Insights - The company reported a revenue of 5.24 billion CNY in 2023, a decrease of 3.7% year-on-year, and a net profit attributable to shareholders of 470 million CNY, down 39.4% year-on-year. The adjusted net profit was 340 million CNY, reflecting a 49.5% decline [2]. - The smart automotive business showed strong growth, achieving revenue of 2.34 billion CNY, up 30.3% year-on-year, while the mobile phone and IoT businesses saw declines of 25.1% and 15.5%, respectively [2]. - The company has initiated a strategic upgrade titled "Smart to Intelligent," which has led to increased expenses in sales, management, and R&D, resulting in short-term profit pressure. However, cash flow from operating activities improved significantly, reaching 760 million CNY, a 51.9% increase year-on-year [2]. Revenue and Profit Forecast - The company expects revenues for 2024-2026 to be 5.99 billion CNY (+14.2%), 6.92 billion CNY (+15.5%), and 8.00 billion CNY (+15.7%), respectively. Net profits are projected to be 600 million CNY (+27.9%), 770 million CNY (+29.3%), and 960 million CNY (+24.5%) for the same periods [4][11]. - Earnings per share (EPS) are forecasted to be 1.30 CNY, 1.67 CNY, and 2.08 CNY for 2024, 2025, and 2026, respectively [4][11]. Business Segment Analysis - The smart software segment is expected to recover with a revenue growth of 3%, 7%, and 7% from 2024 to 2026, respectively [9]. - The smart connected vehicle segment is projected to grow significantly, with expected revenue increases of 25%, 20%, and 20% over the same period [9]. - The IoT business is anticipated to grow by 8%, 15%, and 15% from 2024 to 2026, benefiting from the integration of AI technologies [9]. Valuation Metrics - The company is currently valued at a PE ratio of 57, which is expected to decrease to 44, 34, and 28 over the next three years [4][12]. - The report suggests that the company’s unique "technology + ecosystem" advantage in the smart automotive sector will allow it to benefit from the increasing complexity and value of automotive software [12].