Incident: On August 4, the company released a performance report. 2024H1 expects to achieve operating income of 266.09 billion yuan, yoy +28.7%; net profit to mother of 8.74 billion yuan, yoy +22.0%. Among them, Q2 achieved revenue of 147.4 billion yuan in a single quarter, yoy +46.1%; net profit to mother of 4.55 billion yuan, yoy +12.9%.
Comment:
Benefiting from significant AI growth, Q2 single quarter revenue/profit reached a record high. The company is the only manufacturer in the world that has the ability to service the entire generative AI industry chain. With its vertical integration capabilities, cloud computing business revenue has grown strongly, with AI server product revenue growing exponentially. Looking at the industrial chain, the company, as the leader in server ODM, occupies a key position in the AI industry chain. Therefore, since the launch of AI GPUs, the company's performance has been clearly stimulated, and 2024Q2 has recorded record revenue and profit in a single quarter.
The AI track is long and snowy, and the company's prospects are bright. Currently, the development of AI has not stopped, and software and hardware are being iterated simultaneously. According to recent earnings reports in North America, AI has created greater collaboration with cloud vendors' old businesses (such as advertising recommendations, search recommendations, etc.), and some cloud vendors have received good returns. Looking forward to the future, AI is expected to generate more demand, and there is still plenty of room for improvement in computing power. The company continues to focus on GPU modules, substrates and back-end AI server design and system integration upstream of the AI industry value chain, making full use of the intelligent manufacturing and R&D advantages of the entire industry chain to provide customers with complete solutions, and is expected to continue to enjoy the dividends of industry development.
Profit forecast and investment rating: We expect the company's 2024E/2025E/2026E net profit to be 26.459/32.717/36.634 billion yuan, yoy +26%/+24%/+12%, respectively. The company is a core individual stock in the computing power industry chain. We are optimistic about the company's development prospects in this field and maintain a “buy” rating for the company.
Risk factors: Risk of AI development falling short of expectations; risk of macroeconomic fluctuations; risk of short-term stock price fluctuations.