Event: The company released its third quarter 2024 report. In the first three quarters of 2024, the company achieved operating income of 336.6534 million yuan, a year-on-year increase of 29.95%; In the third quarter of 2024, the company achieved an operating income of 131.0032 million yuan, a year-on-year increase of 26.75% and a quarter-on-quarter increase of 11.52%, and realized a net profit of -7.1205 million yuan after deducting non-attributable to the parent company, and the loss amount narrowed by 24.38 million yuan year-on-year and 13.5986 million yuan quarter-on-quarter.

Comments: Operating income in the first three quarters of 2024 and single-quarter operating income in the third quarter hit a record high. In the third quarter of 2024, the company achieved operating income of 131.0032 million yuan, and the single-quarter revenue continued to grow year-on-year and quarter-on-quarter and hit a new high, mainly due to two reasons: on the one hand, the company's continuous investment in new products in the first three quarters of 2024 has brought remarkable results, and the revenue of the pressure product line increased by 156.61% year-on-year; On the other hand, the micro differential pressure sensor products have become the main driver of growth, and its revenue increased by 474.65% year-on-year, especially after the barometer products have been certified by domestic customers, which has promoted the optimization of the company's product structure and the growth of revenue scale. The single-quarter gross profit margin in the third quarter was 23.01%, a new high in the past two years, an increase of 10.58 pct year-on-year and 2.06 pct quarter-on-quarter, and the net profit loss deducted from non-attributable to the parent company in a single quarter narrowed by 24.38 million yuan year-on-year and 13.5986 million yuan quarter-on-quarter, mainly due to the increase in the proportion of revenue from new products with high gross margin; With the smooth expansion of the company's new products and the improvement of product profitability, we are optimistic about the rapid growth of the company's performance.

As a leader in the design and manufacturing of MEMS chips in multiple categories, the company continues to invest heavily in R&D and build technical barriers, and the cumulative investment in a number of research projects has exceeded the estimated total investment scale. The company is one of the few companies in China that has the ability to independently design chips in the fields of MEMS acoustic sensors, MEMS pressure sensors and MEMS inertial sensors, and is a practitioner of R&D and localization of the whole MEMS industry chain, and is committed to becoming the world's leading MEMS solution provider. In the first three quarters of 2024, the company maintained a high level of R&D investment, adhered to technological innovation, and continuously strengthened the R&D of new products, new technologies and new processes, with R&D expenses reaching a record high of 58.3348 million yuan. With

the stable consumer electronics market and the growing demand for emerging micro-differential pressure products, Minxin is expected to gain new opportunities in the industrial upgrading driven by AI technology by virtue of its leading acoustic MEMS shipments and R&D capabilities of the whole industry chain. At present, the prosperity of the consumer electronics market, such as mobile phones and headphones, remains stable, while the demand in emerging fields such as micro-differential pressure products is growing rapidly. In particular, barometer products are expanding to other brands after passing the certification of well-known domestic customers. IMU products are expected to receive bulk orders with the introduction and testing of downstream customers. With the rapid development of artificial intelligence, voice interaction will become the main mode of interaction, which will increase the application scope and technology upgrade needs of acoustic sensors. As a leading manufacturer of acoustic MEMS shipments, Minxin has R&D capabilities across the entire industry chain and is expected to gain new market opportunities in AI-driven industrial upgrading.

The equity incentive plan was released to demonstrate confidence in subsequent development, and part of the first independent exercise of the first exercise period was granted. On April 25, 2024, part of the company's equity incentive plan was granted for the first time, and the exercise conditions for the first exercise period were met. A total of 28 incentive recipients met the conditions for exercising their rights; As of September 30, 2024, the cumulative number of shares exercised and registered in the third quarter was 6,488 shares, accounting for 6.26% of the total exercisable rights, while the cumulative number of shares exercised and registered from the beginning of the year to that date reached 87,794 shares, accounting for 84.72% of the total exercisable rights.

Investment suggestion: Due to the good performance of the company's new products and the downstream demand for AI applications, we have raised our profit forecast, and it is expected that the company's net profit attributable to the parent company in 2024/2025/2026 will be raised from -13.49/32.90/60.44 million yuan to -4.22/38.43/66.16 million yuan, maintaining the company's "hold" rating.

Risk warning: technology iteration and substitution risks, downstream demand is less than expected, market competition leads to a decline in gross profit margin, and the loss of R&D technicians