USISH(601231) 东方证券·2024-11-07 12:47Investment Rating - The report maintains a Buy rating for the company with a target price of 21.75 RMB based on a 29x PE valuation for 2024 [2][8] Core Views - Q3 Revenue Growth: The company's Q3 revenue increased by 3% YoY to 16.6 billion RMB, but net profit attributable to the parent company declined by 18% YoY to 510 million RMB due to factors such as exchange rate losses [1] - Full-Year Profit Decline: For the first three quarters, net profit attributable to the parent company decreased by 7% YoY to approximately 1.3 billion RMB, while operating cash flow was 2 billion RMB [1] - Q4 Outlook: The company expects Q4 revenue to decline by 5% QoQ, with operating profit margin expected to drop by 1 percentage point due to higher operating costs [1] - Global Expansion Impact: The company is expanding production facilities in Taiwan, Mexico, Vietnam, and Poland, increasing total capacity by 30%, but higher depreciation costs and lagging order growth are impacting short-term profitability [1] Business Segment Performance - Cloud and Storage Products: Revenue for the first three quarters increased by 31% YoY to 4.53 billion RMB, driven by strong growth in server motherboards, which saw over 50% YoY growth [1] - Automotive Electronics: Revenue for the first three quarters rose by 30% YoY to 4.68 billion RMB, partly due to the consolidation of Hirschmann Car Communication in Q4 2023 [1] - Miniaturization Business: Despite short-term challenges in market share and profitability for communication SiP modules, the company expects recovery in 2024, driven by growing demand for wearable devices integrating AI and health monitoring features [1] Financial Projections - Earnings Per Share (EPS): The report forecasts EPS for 2024-2026 to be 0.75 RMB, 0.97 RMB, and 1.12 RMB, respectively, with downward revisions to revenue and gross margin assumptions [2][8] - Revenue and Profit Trends: Revenue is expected to decline by 1% in 2024 but grow by 8% in 2025 and 2026, while net profit is projected to decline by 15% in 2024 before recovering with 28% and 16% growth in 2025 and 2026, respectively [4] Valuation and Market Performance - Valuation Metrics: The company's 2024 PE ratio is estimated at 20x, with a PB ratio of 1.9x [4] - Stock Performance: The stock price as of November 5, 2024, was 15.15 RMB, with a 52-week range of 10.62 RMB to 17.57 RMB [5] Global Presence and Strategy - Global Footprint: The company operates in 12 countries with 31 production sites, focusing on expanding its presence in key markets such as China, Vietnam, and Mexico [1] - Strategic Investments: The company is investing in global talent, R&D, smart manufacturing, and digital transformation to support its international operations [1]