Tstc(SH:600552) Changjiang Securities·2024-05-20 08:32Investment Rating - The report maintains a "Buy" rating for the company [7][5]. Core Insights - The company reported Q1 2024 revenue of 1.26 billion, a year-on-year decrease of 0.5%, and a net profit attributable to shareholders of 0.14 billion, down 54.8% year-on-year. The non-recurring net profit showed a loss of 0.31 billion, but this was an improvement of 77.3% year-on-year [21][37]. - The new materials business is expected to expand, with projections for net profits of 0.22 billion and 0.29 billion in 2024 and 2025, respectively, corresponding to PE ratios of 48 and 38 [5][38]. Summary by Sections Financial Performance - Q1 2024 revenue was 1.26 billion, down 0.5% year-on-year; net profit attributable to shareholders was 0.14 billion, down 54.8% year-on-year; non-recurring net profit showed a loss of 0.31 billion, but improved by 77.3% year-on-year [21][37]. - The gross margin for Q1 was 14.3%, an increase of 1.4 percentage points year-on-year, primarily due to the contribution from high-purity quartz sand [37]. - The company’s operating expenses increased, with R&D expenses rising by 2.3 percentage points due to ongoing technological innovations [37]. Business Development - The company’s spherical materials have seen strong demand in various sectors, including copper-clad laminates, packaging materials, and new energy batteries, with sales increasing by 85% year-on-year [4]. - The UTG project is entering a growth phase, with successful integration into major client supply chains, including LGD and Samsung [22]. Future Outlook - The company has launched a stock incentive plan aimed at enhancing growth expectations, with projected non-recurring net profits of 0.18 billion, 0.26 billion, and 0.30 billion for 2024 to 2026 [38]. - The report anticipates a gradual recovery in revenue, with total revenue projections of 5.76 billion, 6.55 billion, and 7.50 billion for 2024, 2025, and 2026, respectively [28].