Qingdao Gaoce(SH:688556) Soochow Securities·2024-04-25 04:00Investment Rating - The report maintains a "Buy" rating for the company [2][8] Core Views - The company's overall profitability has declined, with a gross margin of 32.4% in Q1 2024, down 10.7 percentage points year-on-year, and a net profit margin of 14.9%, down 11.7 percentage points year-on-year [1] - The slicing OEM business continues to penetrate the market, with an expected increase in operating rates. By the end of 2023, the company's slicing OEM capacity reached 38GW, with effective shipments of approximately 25.5GW [1] - The company is projected to achieve a net profit of 9.9 billion, 13.8 billion, and 16.8 billion yuan for 2024-2026, corresponding to P/E ratios of 10, 7, and 6 times respectively [2] Financial Performance Summary - In Q1 2024, the company reported operating revenue of 1.42 billion yuan, a year-on-year increase of 13%, while net profit was 210 million yuan, a decrease of 37% year-on-year [8] - The company's cash flow from operating activities for Q1 2024 was -390 million yuan, primarily due to high production payments [9] - The company's inventory as of March 31, 2024, was 1.39 billion yuan, up 35% year-on-year, while contract liabilities were 450 million yuan, down 10% year-on-year [9] Production and Capacity Insights - The company plans to enhance its production capabilities in diamond wire saws, with a target of over 20% of total shipments coming from tungsten wire saws in 2024 [10] - The company aims to maintain a stable operating rate of around 80% in its slicing OEM business by leveraging technological advantages to benefit customers [1]