Investment Highlights - The company is initiating coverage on Cankin Technology (688182) with an "Outperform" rating and a target price of 27.02 CNY, driven by the ongoing construction of 5G base stations and the expansion of application scenarios that create new demand [1] - The global market for dielectric waveguide filters is expected to grow at a compound annual growth rate (CAGR) of 15.5% from 2024 to 2033, benefiting the company as a leading domestic high-end electronic ceramic component manufacturer [1][2] - The company is optimistic about the development of new 5G application scenarios and the introduction of new HTCC customers, which sets it apart from market expectations [3] Product Development and Capacity Expansion - The company has developed eight ceramic formulation systems in the HTCC field and has completed the development and sampling of over ten types of HTCC packaging products, with a projected revenue growth of 330.01% year-on-year for the HTCC business in 2024 [2] - The production capacity is expected to exceed 750,000 units in 2024, representing a year-on-year increase of over nine times, which will gradually enhance performance as capacity is released [2] Profit Forecast and Valuation - The company forecasts earnings per share (EPS) of 0.31 CNY and 0.37 CNY for 2025 and 2026, respectively, with a CAGR of 58.9% from 2024 to 2026 [5] - Based on a 35 times price-to-earnings ratio for 2028, the target market value is estimated at 10.809 billion CNY, indicating an 11.66% upside potential from the current stock price [5]

Core Viewpoint - Cankun Technology, a leading manufacturer of microwave dielectric ceramic components in China, has shown significant growth potential driven by new product launches and market expansion, particularly in the 5G-A sector [6] Group 1: Company Overview - Cankun Technology was established on April 9, 2004, and listed on the Shanghai Stock Exchange on November 16, 2021, with its headquarters in Suzhou, Jiangsu Province [1] - The company specializes in the research, production, and sales of microwave dielectric ceramic components, operating within the communication equipment sector and involved in various emerging technology fields [1] Group 2: Financial Performance - For Q3 2025, Cankun Technology reported revenue of 491 million yuan, ranking 30th among 36 companies in the industry, significantly lower than the top competitors [2] - The company's net profit for the same period was approximately 88.23 million yuan, placing it 17th in the industry, again trailing behind leading firms [2] Group 3: Financial Ratios - As of Q3 2025, Cankun Technology's debt-to-asset ratio was 15.10%, an increase from 13.43% year-on-year, but still below the industry average of 38.12%, indicating strong solvency [3] - The gross profit margin for the same period was 32.62%, up from 30.99% year-on-year, and higher than the industry average of 30.08%, reflecting robust profitability [3] Group 4: Shareholder Information - As of September 30, 2025, the number of A-share shareholders increased by 35.65% to 12,300, while the average number of shares held per shareholder decreased by 26.28% [5] - New significant shareholders include Hong Kong Central Clearing Limited and Huatai-PineBridge Innovation Mixed Fund, while a previous major shareholder exited the top ten list [5] Group 5: Growth Prospects - Cankun Technology is expected to see rapid revenue and profit growth in 2025, driven by new product mass production and market expansion, particularly in the 5G-A and HTCC sectors [6] - The company anticipates a significant market opportunity in the ceramic dielectric waveguide filter segment, especially with the rise of low-altitude economy applications [6] - Forecasted net profits for 2025 to 2027 are projected at 104 million, 214 million, and 362 million yuan, respectively, with substantial year-on-year growth rates [6]

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - The company is expected to experience significant growth in its main business of filters due to the capital expenditure from operators on 5G-A, with production capacity for HTCC anticipated to be released gradually in 2025. This will enhance the company's growth potential and improve the stability of future performance [2][4]. - The company's revenue and net profit have shown rapid growth, with Q1-Q3 2025 revenue reaching 491 million yuan, a year-on-year increase of 82.47%, and net profit of 86 million yuan, up 72.33% year-on-year. In Q3 2025 alone, revenue was 204 million yuan, reflecting a 151.38% increase year-on-year, with net profit at 34 million yuan, a 116.22% increase year-on-year [4][6]. - The gross margin for Q3 2025 was 34.62%, an increase of 3.19 percentage points year-on-year and 3.85 percentage points quarter-on-quarter, primarily due to changes in product structure and improved capacity utilization [8]. Financial Performance and Forecast - The company is projected to achieve a net profit attributable to shareholders of 104 million yuan, 214 million yuan, and 362 million yuan for the years 2025, 2026, and 2027, respectively, representing year-on-year growth rates of 80%, 105%, and 69%. The corresponding PE ratios are expected to be 98x, 48x, and 28x [2][8]. - The company’s revenue is expected to grow significantly due to the increasing demand for 5G-A base stations and the introduction of new products in the consumer electronics sector, which will also contribute to the overall growth [2][4].