TORCH ELECTRON(SH:603678) Minsheng Securities·2024-04-27 10:00Investment Rating - The report maintains a "Recommended" rating for the company, Torch Electronics (603678.SH) [1][2]. Core Views - The company reported a revenue of 650 million yuan in Q1 2024, a year-on-year increase of 1.6%, but a net profit attributable to shareholders of 74 million yuan, down 41.2% year-on-year. The performance aligns with market expectations, influenced by industry conditions and a decline in product prices [1]. - Q1 2024 saw a significant quarter-on-quarter profit growth of 182%, indicating potential recovery as demand improves. Revenue has shown a recovery trend with growth rates of 29.7%, 9.3%, and 1.6% from Q3 2023 to Q1 2024 [1]. - The company is actively seeking new business growth points across its three main segments: components, new materials, and international trade, with notable achievements in customer acquisition and product development [1]. Financial Summary - The company forecasts revenues of 4.054 billion yuan, 4.682 billion yuan, and 5.337 billion yuan for 2024, 2025, and 2026 respectively, with corresponding net profits of 375 million yuan, 438 million yuan, and 505 million yuan [4]. - The projected growth rates for revenue are 15.71%, 15.50%, and 13.99% for the years 2024 to 2026 [4]. - The report indicates a decrease in gross margin to 32.6% and net margin to 10.7% in Q1 2024, reflecting a year-on-year decline of 8.9 percentage points and 9.2 percentage points respectively [1].