CICT Mobile (SH:688387) Tianfeng Securities·2024-05-03 09:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price set at 5.95 CNY per share, indicating a potential upside of 10%-20% over the next six months [6][15]. Core Insights - The company has achieved continuous loss reduction for 23 years, with a reported revenue of 7.848 billion CNY in 2023, a year-on-year increase of 13%. The net profit attributable to the parent company was -357 million CNY, a reduction in loss of approximately 317 million CNY compared to the previous year [1]. - In Q1 2024, the company reported a revenue of 969 million CNY, a decrease of 29% year-on-year, with a net profit of -159 million CNY, reflecting a significant decline due to slower construction plans from telecom operators and macroeconomic impacts [1]. - The company is actively expanding into the 5G-A, 6G, and satellite fields, with a focus on high-capacity communication and innovative technologies [3]. Financial Performance Summary - In 2023, the company's system equipment revenue reached 2.31 billion CNY, a 26% increase year-on-year, with a gross margin of 36%, up by 2.6 percentage points. The company has significantly increased its market share in the 5G equipment sector [2]. - The company’s R&D investment in 2023 was 1.38 billion CNY, a 3% increase, indicating a commitment to innovation and development in next-generation communication technologies [3]. - The financial forecasts for net profit attributable to the parent company for 2024-2026 are projected at 6 million CNY, 281 million CNY, and 409 million CNY respectively, reflecting a positive growth trajectory [4]. Revenue Breakdown - The revenue from various business segments in 2023 includes: - System equipment: 2.31 billion CNY, up 26% YoY - Indoor equipment: 510 million CNY, up 25% YoY - Industry private network equipment: 570 million CNY, up 23% YoY - Mobile communication integrated services: 2.86 billion CNY, up 3% YoY [2]. Market Position and Future Outlook - The company has improved its domestic market share in mobile communication equipment and is well-positioned to capitalize on emerging growth areas in 5.5G, 6G, and satellite communications [4]. - The first version of the 5G-A standard is expected to be frozen in 2024, with commercial deployment anticipated in 2025, which could provide significant growth opportunities for the company [3].