Dingtong(688668) 天风证券·2024-07-23 06:02Investment Rating - The report initiates coverage with a rating of "Buy" for the company [7]. Core Views - The company is positioned as a leading player in the connector component industry, with expectations for performance recovery driven by industry revival [19]. - The global connector market is experiencing stable growth, particularly in emerging markets like China and the Asia-Pacific region, which are expected to continue driving demand [2][62]. - The company is actively developing new products in response to the high-speed requirements driven by AI advancements, with a focus on communication connectors and automotive connectors [5][68]. Summary by Sections Company Overview - The company, established in 2003 and listed on the STAR Market in December 2020, specializes in the research, production, and sales of high-speed communication connectors and automotive connectors [19][21]. - It has built long-term partnerships with industry leaders such as Amphenol, Molex, and TE Connectivity, enhancing its competitive edge [5][21]. Market Demand and Growth - The connector market is benefiting from rapid development in downstream industries, with a significant increase in demand for connectors, particularly in the automotive and communication sectors [4][47]. - China has become the largest consumer market for connectors, with a market share of 31.51% in 2022, and is expected to continue growing [62][63]. Financial Performance and Forecast - The company reported a revenue of 194 million yuan in Q1 2024, a year-on-year increase of 19.73%, although net profit decreased by 45.11% [5][34]. - The forecast for net profit from 2024 to 2026 is projected to be 110 million, 160 million, and 220 million yuan, respectively, with corresponding P/E ratios of 47, 32, and 23 times [5][6]. Product Development and R&D - The company is enhancing its R&D capabilities, with a focus on high-speed connectors and precision molds, maintaining a high R&D investment ratio of 10.65% of revenue in 2023 [43][41]. - The demand for automotive connectors is expected to rise due to the increasing penetration of electric vehicles, which will drive both volume and price growth [6][66]. Competitive Positioning - The company is transitioning towards becoming a Tier 1 supplier in the automotive sector, deepening collaborations with leading industry players [6][66]. - The company’s core products include communication connectors and automotive connectors, which are critical for various applications in telecommunications and automotive electronics [22][25].