Dingtong(SH:688668) East Money Securities·2024-04-24 08:00Investment Rating - The report assigns an "Accumulate" rating for the company [2]. Core Insights - The company reported a revenue of 194 million yuan in Q1 2024, representing a year-on-year increase of 19.73%, while the net profit attributable to shareholders was 18 million yuan, down 45.11% year-on-year. The first quarter showed a recovery trend with improvements in revenue, gross margin, net margin, and net profit attributable to shareholders [1]. - In 2023, the company experienced a significant decline in revenue and net profit, with a year-on-year decrease of 18.65% in revenue and 60.48% in net profit, primarily due to a sluggish global macroeconomic environment and weak demand in the communication market [1]. - The company has maintained strong relationships with major clients in the connector industry, including Molex, Amphenol, and BYD, with the top five clients accounting for 83.96% of total revenue in 2023 [1]. Summary by Sections Communication Business - The communication connector business faced unprecedented challenges in the first half of 2023, with demand from end customers falling short of expectations. However, since the end of Q3 2023, market conditions have gradually improved, leading to a recovery in demand for communication connector products [1]. - The company is actively collaborating with direct clients to expand product categories and develop new products in line with advancements in artificial intelligence [1]. Automotive Business - Since entering the new energy vehicle sector, the company has successfully partnered with leading enterprises such as BYD and FAW, providing a stable business source and growth potential [1]. - Despite high sales growth in the new energy market, the company faces intense market competition, leading to significant pressure on costs and a decline in gross margins [1]. New Product Development - The company continues to focus on technological innovation, particularly in high-speed communication connector modules, and is developing new projects in battery management systems and other areas to diversify its product offerings [1][11]. Financial Projections - Revenue projections for 2024, 2025, and 2026 are 823 million yuan, 1,001.6 million yuan, and 1,230.52 million yuan, respectively, with corresponding net profits of 59.14 million yuan, 73.51 million yuan, and 92.37 million yuan [4][11]. - The report anticipates a PE ratio of 89.72 for 2024, decreasing to 57.45 by 2026, indicating a potential improvement in valuation as the company recovers [11].