DSBJ(002384) Minsheng Securities·2024-08-21 13:00Investment Rating - The report maintains a "Recommend" rating for Dongshan Precision (002384 SZ) [1][2] Core Views - Dongshan Precision's H1 2024 performance met expectations, with revenue reaching RMB 16 629 billion (yoy +21 67%) but net profit attributable to shareholders declined to RMB 561 million (yoy -32 01%) [1] - The company's FPC business is expected to benefit from AI innovation, particularly in the consumer electronics sector, due to increased demand for chip computing power and energy consumption [1] - The new energy business is growing rapidly, contributing RMB 3 81 billion in H1 2024 (yoy +29 3%), and is becoming a strong engine for long-term growth [1] - The company is expected to achieve net profits of RMB 2 32 billion, RMB 3 29 billion, and RMB 4 00 billion in 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 16x, 11x, and 10x [1][2] Financial Performance Summary Revenue and Profit - H1 2024 revenue: RMB 16 629 billion (yoy +21 67%) [1] - H1 2024 net profit attributable to shareholders: RMB 561 million (yoy -32 01%) [1] - Q2 2024 revenue: RMB 8 884 billion (yoy +24 16%, qoq +14 71%) [1] - Q2 2024 net profit attributable to shareholders: RMB 272 million (yoy -22 95%, qoq -5 88%) [1] Product Breakdown - Electronic circuit products: Revenue of RMB 10 85 billion (yoy +20 93%), gross margin of 17 41% (yoy -1 44pct) [1] - LED display devices: Revenue of RMB 438 million (yoy +4 30%), gross margin of -26 89% (yoy +20 1pct) [1] - Touch panels and LCD modules: Revenue of RMB 3 122 billion (yoy +40 73%), gross margin of 3 96% (yoy +3 4pct) [1] - Precision component products: Revenue of RMB 2 111 billion (yoy +6 37%), gross margin of 10 38% (yoy -4 24pct) [1] Future Projections - 2024E revenue: RMB 37 561 billion (yoy +11 6%) [2] - 2025E revenue: RMB 43 811 billion (yoy +16 6%) [2] - 2026E revenue: RMB 50 382 billion (yoy +15 0%) [2] - 2024E net profit attributable to shareholders: RMB 2 319 billion (yoy +18 0%) [2] - 2025E net profit attributable to shareholders: RMB 3 286 billion (yoy +41 7%) [2] - 2026E net profit attributable to shareholders: RMB 3 969 billion (yoy +20 8%) [2] Business Strategy and Growth Drivers - The company is deeply integrated with major clients in the FPC business, particularly in the consumer electronics sector, and is expected to benefit from AI innovation [1] - The new energy business is expanding rapidly, with the company supplying FPC, hard boards, automotive displays, and functional structural components for new energy vehicles [1] - The company has made significant CAPEX investments in the new energy sector, including the acquisition of Suzhou Jingdu and the Aranda factory in the US, and is progressing well with new base construction and product mass production [1] Valuation Metrics - 2024E P/E: 16x [2] - 2025E P/E: 11x [2] - 2026E P/E: 10x [2] - 2024E P/B: 1 9x [2] - 2025E P/B: 1 7x [2] - 2026E P/B: 1 5x [2]