Avary Holding(002938) 华创证券·2024-10-31 14:58Investment Rating - Strong Buy (Maintained) with a target price of 48.75 RMB, current price at 37.53 RMB [1] Core Views - The company's Q3 2024 performance met expectations, with significant improvements in operations [2] - Revenue for Q3 2024 reached 10.36 billion RMB, a YoY increase of 16.14%, and a QoQ increase of 60.89% [1] - Net profit attributable to shareholders in Q3 2024 was 1.19 billion RMB, a YoY increase of 15.26%, and a QoQ increase of 314.66% [1] - Gross margin for Q3 2024 was 23.62%, up 0.78 pcts YoY and 8.14 pcts QoQ [1] - The launch of AI smartphones by major clients is expected to drive a new wave of innovation in the terminal market, potentially boosting sales and upgrading PCB products to higher quality, low-loss, high-heat dissipation, and fine-line products [2] - The company is well-positioned to benefit from the rapid iteration and upgrade of product specifications due to its leading position in the global FPC market [2] - The AI server and smart car businesses are developing rapidly, with the automotive sector expected to see significant growth in H2 2024 due to the mass production of radar computing boards and autonomous driving domain control boards [2] - The company is actively expanding its presence in the AI server market, with significant growth in related businesses in H1 2024 and ongoing efforts to accelerate customer certification and testing in the Huaian and Thailand industrial parks [2] Financial Performance Summary - Total revenue for the first three quarters of 2024 was 23.487 billion RMB, a YoY increase of 14.82% [1] - Net profit attributable to shareholders for the first three quarters of 2024 was 1.974 billion RMB, a YoY increase of 7.05% [1] - Non-GAAP net profit for the first three quarters of 2024 was 1.929 billion RMB, a YoY increase of 8.89% [1] - Gross margin for the first three quarters of 2024 was 20.47%, up 0.19 pcts YoY [1] - The company's EPS for 2024-2026 is forecasted to be 1.46/1.95/2.14 RMB, adjusted from previous estimates of 1.58/1.95/2.14 RMB due to exchange rate fluctuations [2] Industry and Market Outlook - The AI terminal market is expected to drive a new cycle of innovation, with AI smartphones leading the way in boosting terminal product sales and upgrading PCB products [2] - The company's focus on high-end AI server products and its expansion in the automotive sector are expected to create new growth engines [2] - The competitive landscape in the FPC market is expected to improve as technological and process barriers increase, benefiting the company as a global leader in FPC [2]