VEICHI(SH:688698) Soochow Securities·2024-05-03 11:00Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Insights - The domestic industrial control business is performing better than the industry average, with a significant alpha. In Q1 2024, the company's revenue increased by 15% year-on-year, outperforming the market, with specific growth in servo revenue of 40% and a 4% increase in frequency converter revenue [1][6] - The company is expected to achieve a year-on-year revenue growth of 25-35% in Q1 2024, driven by strong performance in industries such as textiles, machine tools, and photovoltaic irrigation, while real estate-related lifting industries are under pressure [1] - The company maintains its profit forecast for 2024-2026, with net profits expected to be CNY 249 million, CNY 296 million, and CNY 361 million, representing year-on-year growth of 31%, 19%, and 22% respectively, with corresponding P/E ratios of 24, 20, and 17 times [2] Financial Performance Summary - In Q1 2024, the company reported total revenue of CNY 330 million, a 15% increase year-on-year, and a net profit of CNY 54 million, up 25% year-on-year, aligning with market expectations. The gross margin for Q1 was 40.1%, an increase of 1.9 percentage points year-on-year [6] - The company anticipates a recovery in overseas markets in Q2 2024, with expected revenue growth of 30-40% year-on-year, despite a projected decline of 15-20% in Q1 due to high base effects from the previous year [7] - The company's total revenue for 2024 is projected to reach CNY 1.639 billion, with a year-on-year growth rate of 25.59% [11]