T&S(SZ:300570) Minsheng Securities·2024-03-28 16:00Investment Rating - The report maintains a "Recommended" rating for the company [1][6]. Core Views - The company achieved a revenue of 885 million yuan in 2023, a year-on-year decrease of 5.22%, and a net profit attributable to shareholders of 155 million yuan, down 13.86% year-on-year. However, in Q4 2023, the company saw significant improvements with a revenue of 262 million yuan, representing a year-on-year increase of 13.83% and a quarter-on-quarter increase of 12.50%. The net profit for Q4 2023 was 50 million yuan, up 69.74% year-on-year and 51.57% quarter-on-quarter [6]. - The company is the largest manufacturer of dense connection products globally and is focusing on expanding its product matrix to capitalize on opportunities in the AI sector. The company has made significant advancements in both passive and active optical components, with ongoing development of 800G optical modules [6]. - The establishment of a subsidiary in Vietnam aims to enhance overseas production capacity and supply chain resilience, which is expected to help the company attract new quality customers and expand market share [6]. - The forecast for net profit attributable to shareholders for 2024-2026 is 300 million, 448 million, and 543 million yuan, respectively, with corresponding PE multiples of 28, 19, and 15 times [6]. Summary by Sections Financial Performance - In 2023, the company reported total revenue of 885 million yuan, with a year-on-year decline of 5.22%. The net profit attributable to shareholders was 155 million yuan, down 13.86% year-on-year. The fourth quarter of 2023 showed a revenue of 262 million yuan, a year-on-year increase of 13.83% and a quarter-on-quarter increase of 12.50% [6][18]. - The comprehensive gross margin for 2023 was 29.40%, a decrease of 3.38 percentage points from 2022, primarily due to an increase in the proportion of revenue from the lower-margin domestic market [6]. Growth Prospects - The company is well-positioned to benefit from the growing demand for optical devices driven by AI developments. It continues to strengthen its competitive edge in the dense optical connection field and is advancing its product offerings in both passive and active optical components [6]. - The establishment of a subsidiary in Vietnam is expected to enhance production capacity and supply chain flexibility, which will help meet diverse overseas customer needs and improve customer retention [6]. Financial Forecast - The projected revenues for 2024, 2025, and 2026 are 1.71 billion, 2.37 billion, and 2.87 billion yuan, respectively, with growth rates of 93.29%, 38.32%, and 21.09% [18]. - The forecasted net profit for the same years is 300 million, 448 million, and 543 million yuan, with corresponding growth rates of 93.44%, 49.32%, and 21.18% [18].