occurrences
Zhongke Shuguang released its 2024 semi-annual report. In the first half of 2024, the company achieved revenue of 5.712 billion yuan, up 5.77% year on year; net profit to mother 0.563 billion yuan, up 3.38% year on year; net profit after deducting non-return to mother 0.366 billion yuan, up 20.00% year on year; gross margin was 26.25%, up 0.21pct year on year. In the second quarter of 2024, the company achieved revenue of 3.233 billion yuan, up 4.21% year on year; net profit to mother was 0.421 billion yuan, up 1.64% year on year; net profit after deducting non-return to mother was 0.31 billion yuan, up 20.76% year on year; gross margin was 25.78%, down 1.75 pct year on year.
The hardware side grew steadily, and the growth of software development and system integration quickly split the company's revenue in the first half of 2024. By product type, IT equipment business revenue was 5.126 billion yuan, up 3.98% year on year, and software development and system integration business revenue was 0.584 billion yuan, up 24.77% year on year; by market or customer type, enterprise market revenue was 2.137 billion yuan, up 22.95% year on year, and public utility market revenue was 3.573 billion yuan Yuan, down 2.37% year over year. The company has mastered a large number of core technologies in the fields of high-end computers, storage, system software, cloud computing and big data. In the future, it is expected to maintain steady growth on the hardware side with technical advantages and promote rapid growth in software development and system integration businesses.
Continued investment in R&D enhances market competitiveness, and the entire industry chain construction seizes industrial opportunities. The company's R&D expenses reached 0.625 billion yuan in the first half of 2024, an increase of 0.041 billion yuan over the same period last year, and an increase of 6.93% over the same period last year. With the replacement of domestic products, the development of artificial intelligence accelerates, and the company develops high-end computer products such as immersive liquid-cooled blades and artificial intelligence workstations. The company participated in the construction of local intelligent computing centers to provide computing power infrastructure solutions, and promoted a virtuous cycle of data, computing power, models, and applications through various operating models such as computing power operation, platform operation, and ecological operation. In the first half of 2024, the company released a full-stack self-developed centralized storage system to meet high-performance storage requirements, vigorously develop the computing ecosystem, accelerate the construction of an artificial intelligence software ecosystem, and further enhance competitiveness.
Profit Forecasts, Valuations, and Ratings
Considering that the commercialization process of the big model will gradually advance, we expect the company's revenue for 2024-2026 to be 17.067/20.088/23.362 billion yuan, respectively, with year-on-year growth rates of 18.91%/17.70%/16.30%, and net profit to mother of 2.28/2.748/3.295 billion yuan, respectively, with year-on-year growth rates of 24.18%/20.56%/19.88%, EPS 1.56/1.88/2.25 yuan/share, respectively, for 3 years The CAGR is 21.53%. Given the company's leading position in high-performance computing, it has products and collaborative advantages throughout the industry chain, and is expected to benefit from increased demand for computing power and maintain a “buy” rating.
Risk warning: downstream customer demand falls short of expectations, market competition increases risk, etc.