Introduction to this report:
The company has the entire ICT industry chain and cloud service service capabilities. Based on the “Cloud Network Security Storage” full-stack layout, in the context of AIGC driving demand for intelligent computing centers, revenue from related products is rapidly increasing, and future revenue growth may exceed expectations.
Key points of investment:
Covered for the first time, a “gain” rating was given. As the leader of the entire ICT industry chain, the company expects revenue of 786.07/865.27/1035.28 billion yuan in 2023-2025, and 0.78/0.92/1.10 yuan for EPS, respectively, with a target price of 30.73 yuan, corresponding to 33.45 times PE in 2024.
Steady in the industry, with a “cloud network security storage terminal” full stack layout. The company has maintained a leading position in the ICT industry and continues to lead the market share of many products. At the same time, the company has built an intelligent computing base, further strengthening the core competitiveness of AI computing power. Furthermore, based on the full-stack layout of the “cloud network security and storage terminal”, it fully empowers the application of customer scenarios, accelerates the digital transformation of the industry, creates new business growth points, and gradually matures new overseas strategies, and the future revenue growth rate may exceed expectations.
Consolidate the advantages of the main business and seize AIGC opportunities. The company launched the Baiye Lingxi private domain model, and has piloted applications in many digital government fields and large enterprises. At the same time, it also pioneered the release of the 51.2T 800G silicon optical data center switch, which is suitable for business scenarios such as AIGC clusters or data center high-performance switching. The upgraded Aofei computing power platform has also realized unified management and intelligent scheduling of heterogeneous and diverse computing power. Furthermore, in terms of deterministic networks, the company built the world's first deterministic network, and various indicators have reached the international advanced level. Leading and forward-looking in technology integration gives the company a first-mover advantage in traditional digital transformation and AI intelligent computing.
Rely on the digital intelligence capabilities of the entire ICT industry to seize the high ground of AI computing power and reinforce the moat. Products related to the company's data center can fully meet the construction needs of AI intelligent computing power networks, and the company has built a MaaS architecture based on full-stack ICT infrastructure, large private domain models, and enabling platforms. Xinhua 3 has been recognized by international authorities as a mature manufacturer of large-scale AI systems. As the iteration of large models accelerates, demand for AI computing power will be rapidly released, and industry prosperity will continue to rise. We believe that under the premise that AI servers are expected to increase product gross profit, the company's deep technology and customer accumulation in AI computing power is expected to help rapid revenue growth and further increase market share.
Risk warning: The risk that cornerstone business recovery falls short of expectations and customer demand shifts.