Lontium(SH:688486)2024-04-25 02:00Investment Rating - The report maintains a "Buy" rating for the company, with a market price of RMB 89.85 and a sector rating of "Outperform" [1]. Core Views - The company reported a significant growth in Q1 2024, with revenue and net profit attributable to shareholders increasing by over 100% year-on-year. R&D investment also rose by over 60% [5][6]. - The substantial increase in advance payments, which grew by approximately 900% year-on-year, indicates a positive outlook for the company's future performance [6]. - The company's products are widely used in the automotive electronics sector, with traditional vehicle bridge chips already integrated into HUD and infotainment systems. The vehicle SerDes chips have completed tape-out and are in the testing phase [6]. Summary by Sections Financial Performance - In Q1 2024, the company achieved revenue of RMB 104 million, a year-on-year increase of 101.95%. The net profit attributable to shareholders was RMB 31 million, up 324.85% year-on-year. The non-recurring net profit was RMB 23 million, reflecting a 379.55% increase year-on-year. The gross margin was 54.11%, slightly down by 0.80 percentage points year-on-year [6]. - R&D expenses amounted to RMB 22 million, representing 21.47% of revenue, with a year-on-year increase of 60.85% [6]. Business Outlook - The company is optimistic about its operational outlook, supported by the expansion of product applications and deepening collaborations with major clients. All business segments, including automotive electronics, video surveillance, and video conferencing, showed significant revenue growth compared to the same period last year [6]. - The automotive electronics segment has seen the introduction of bridge chips into HUD and infotainment systems, with eight chips passing AEC-Q100 certification [6]. Valuation - The report maintains previous earnings forecasts, projecting earnings per share (EPS) of RMB 2.07, RMB 3.11, and RMB 4.80 for 2024, 2025, and 2026, respectively, corresponding to price-to-earnings ratios of 43.3x, 28.9x, and 18.7x [6].