donghua test(300354) 长江证券·2024-04-19 05:32Investment Rating - The report maintains a "Buy" rating for Donghua Testing [9]. Core Views - Donghua Testing's performance in Q1 2024 shows significant recovery with a 45.16% year-on-year increase in revenue and a 165.70% increase in net profit attributable to shareholders, indicating strong project acceptance and revenue recognition from previous orders [5][6]. - The company is focusing on domestic substitution and expanding new business areas, which are expected to drive substantial growth in 2024 [7][8]. - The gross margin and net margin improved in Q1 2024, reflecting enhanced profitability despite previous declines in 2023 [6]. Financial Performance Summary - In 2023, Donghua Testing achieved a revenue of 378 million yuan, a year-on-year increase of 3.03%, but net profit decreased by 27.94% to 88 million yuan [5]. - For Q1 2024, the company reported revenue of 104 million yuan, up 45.16% year-on-year, and net profit of 27 million yuan, up 165.70% [5]. - The gross margin for 2023 was 65.47%, with a slight decline, while Q1 2024 saw an improvement to 67.26% [6]. Business Development Summary - Donghua Testing is leveraging its core technology in structural mechanics testing to expand into high-end markets and enhance its competitive edge against foreign products [7]. - The company is actively developing new sensor products and optimizing existing production lines, which are expected to contribute to long-term growth [8]. - The electrochemical workstation business has shown rapid growth, with ongoing investments in new technologies to enrich the product portfolio [8]. Earnings Forecast - The report projects net profits of 210 million yuan and 300 million yuan for 2024 and 2025, respectively, with corresponding price-to-earnings ratios of 28x and 19x [8].