AFR(SZ:300620) Guotai Junan Securities·2024-04-25 06:02Investment Rating - The report maintains a rating of "Accumulate" for the company, with a target price adjusted to 50.00 yuan, down from the previous 56.00 yuan [3][11]. Core Views - The company's earnings forecast has been lowered due to performance falling short of expectations, particularly in the lithium niobate business, which is still awaiting significant volume production [3][11]. - The acquisition of Baian Industrial has been completed, and the light source module business is expected to contribute additional revenue [3][11]. - The report highlights that the demand for thin-film lithium niobate chips is anticipated to grow, particularly in high-speed modulator applications, which could lead to higher profit margins [3][11]. Summary by Sections Financial Performance - The company's revenue for Q1 2024 is projected to be 1.60 billion yuan, reflecting a year-on-year growth of 3.38%, but the net profit attributable to the parent company is expected to decline by 58.10% to 649 million yuan [3][11]. - The report indicates a significant drop in net profit forecasts for 2024-2026, with expected figures of 0.42 billion yuan, 1.24 billion yuan, and 1.63 billion yuan, representing declines of 66.23%, 29.0%, and 22.40% respectively [3][11]. Market and Business Outlook - The industrial laser market is showing signs of recovery, with price competition easing and gross margins stabilizing [3][11]. - The company continues to invest in new products, such as thin-film lithium niobate chips, although profit levels remain under pressure due to the lack of volume production at customer sites [3][11]. - The report notes that the laser radar business is expected to contribute positively as the company deepens its engagement with leading domestic customers [3][11]. Valuation Metrics - The report provides various financial metrics, including a projected PE ratio of 245.76 for 2024 and a PB ratio of 6.52 [3][11]. - The company's operating profit margin is expected to decline to 3.6% in 2024, down from 12.4% in 2022, indicating pressure on profitability [3][11].