FRD(SZ:300602)2024-05-31 01:00Investment Rating - The investment rating for the company is "Outperform" [4][15][30] Core Views - The company has shown significant improvement in gross margin and operating cash flow, indicating a potential turning point in profitability [5][29][37] - Revenue from consumer electronics has increased significantly, with a notable growth in thermal management materials and devices [14][29] Summary by Sections Financial Performance - In 2023, the company achieved revenue of RMB 4.35 billion, a year-on-year increase of 5.37%, and a net profit attributable to shareholders of RMB 103 million, up 7.31% [37] - The gross profit margin (GPM) was 19.47%, an increase of 2.15 percentage points year-on-year, while the net profit margin (NPM) was 2.37%, up 0.04 percentage points [37] - For Q1 2024, revenue reached RMB 982 million, a 27.05% increase year-on-year, with a net profit of RMB 23.64 million compared to a loss in the same period last year [37] Revenue Breakdown - Revenue from electromagnetic shielding materials and devices was RMB 1.18 billion, with a GPM of 23.06% [14][29] - Revenue from thermal management materials and devices was RMB 1.73 billion, with a GPM of 19.90% [14][29] - The company’s revenue from consumer electronics, telecommunications, and new energy vehicles accounted for 38%, 27%, and 35% of total revenue, respectively [14][29] Earnings Forecast - Forecasted revenues for 2024, 2025, and 2026 are RMB 5.09 billion, RMB 5.83 billion, and RMB 6.60 billion, respectively [15][30] - Expected net profits for the same years are RMB 282 million, RMB 371 million, and RMB 450 million, with corresponding EPS of RMB 0.49, RMB 0.64, and RMB 0.78 [15][30] Valuation - The target price is set at RMB 19.48, based on a forward PE of 40 for 2024 [15][30]