Sangfor Technologies (300454) 申万宏源·2024-11-08 12:47Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market [6]. Core Insights - The company reported a revenue of 4.634 billion yuan for the first three quarters of 2024, reflecting a year-on-year decline of 3.63%. However, Q3 revenue showed a positive trend with a 2.77% increase year-on-year, amounting to 1.926 billion yuan. The net profit attributable to the parent company for Q3 was 0.12 billion yuan, a significant improvement of 54.76% year-on-year [3][4]. - The recovery in downstream demand is anticipated, supported by government fiscal policies aimed at stimulating growth and increasing domestic demand. The company expects a dual recovery in demand from both government and enterprise sectors, which together accounted for approximately 90% of its business in the first half of 2024 [4]. - The gross margin for Q3 was reported at 59.57%, down 6.55 percentage points year-on-year, primarily due to rising hardware procurement costs and intense market competition. However, there is an expectation of declining costs in the near future as prices for storage products have started to decrease [4][5]. - The company has strategically increased its inventory to 5.11 billion yuan, a year-on-year increase of 66.26%, to mitigate the impact of raw material price fluctuations. Operating cash flow for Q3 improved by 25.52% year-on-year, indicating a healthy cash recovery situation [5]. - The company launched significant new security products, including a data security platform and a distributed storage solution, which are expected to enhance operational efficiency and data protection capabilities [5]. Financial Summary - For 2024, the company forecasts total revenue of 7.733 billion yuan, with a slight year-on-year growth of 0.9%. The net profit is projected to be 0.254 billion yuan, representing a year-on-year increase of 28.6% [7]. - The gross margin is expected to recover to 62.1% in 2024, with a gradual improvement in subsequent years [7].