Avary Holding(SZ:002938)2024-04-25 04:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expectation that the company's stock price will outperform the benchmark index by more than 20% over the next 6-12 months [3]. Core Views - The company has shown a year-on-year recovery in profits for Q1 2024, with a notable improvement in net profit compared to revenue. The Q1 2024 revenue reached 6.687 billion RMB, up 0.29% year-on-year, while net profit was 497 million RMB, up 18.81% year-on-year [3]. - The report highlights that despite a challenging 2023 for the consumer electronics industry, the company continues to innovate, particularly in the smartphone sector, which is expected to drive future growth [3]. - The company is actively expanding into high-growth markets such as AI and automotive applications, with significant revenue growth in automotive and server products [3]. Financial Summary - For Q1 2024, the company achieved a gross margin of 20.37%, a slight decrease of 0.53 percentage points year-on-year, while the net profit margin improved by 1.16 percentage points to 7.44% [3]. - The projected revenues for 2024, 2025, and 2026 are 37.631 billion RMB, 42.812 billion RMB, and 48.845 billion RMB, respectively, with corresponding net profits of 4.370 billion RMB, 4.899 billion RMB, and 5.437 billion RMB [4][12]. - The company’s PE ratios for 2024, 2025, and 2026 are projected to be 12.1, 10.8, and 9.7, respectively, indicating a favorable valuation trend [4][12].