营收利润环比改善明显，期间费用管控良好。2024Q2 单季，公司实现营业收入209.45 亿元，同比增长7.32%，环比增长23.16%；归母净利润5.87 亿元，同比增长0.60%，环比增长41.82%；扣非净利润5.51 亿元，同比增长8.46%，环比增长60.54%。报告期内，公司AIGC 应用发展呈现良好增长势头，Q2 业绩环比大幅改善。2024H1，公司实现销售毛利率19.03%，同比降低1.29 pct；销售净利率4.55%，同比降低0.45pct；公司通过优化组织架构加强费用管理，期间费用同比下降12.99%，期间费用管控良好。Matters:
On August 26, the company released its 2024 semi-annual report. In the first half of 2024, the company achieved operating income of 37.951 billion yuan, a year-on-year increase of 5.29%; net profit to mother of 1 billion yuan, a year-on-year decrease of 2.13%; after deducting non-net profit of 0.894 billion yuan, a year-on-year increase of 5.78%.
Commentary:
Revenue and profit improved significantly from month to month, and expenses were well controlled during the period. In the 2024Q2 single quarter, the company achieved operating income of 20.945 billion yuan, up 7.32% year on year, up 23.16% month on month; net profit to mother of 0.587 billion yuan, up 0.60% year on year, up 41.82% month on month; after deducting non-net profit of 0.551 billion yuan, up 8.46% year on year, up 60.54% month on month. During the reporting period, the company's AIGC application development showed a good growth trend, and Q2 performance improved significantly from month to month. With 2024H1, the company achieved a gross sales margin of 19.03%, a year-on-year decrease of 1.29 pct; the net sales margin was 4.55%, a year-on-year decrease of 0.45 pct; the company strengthened cost management by optimizing the organizational structure, and expenses were reduced by 12.99% year on year, and the period cost control was good.
Xinhua's three performance was steady, and revenue from the H3C brand's independent channel business for products and services maintained a high increase. In terms of holding subsidiaries, Xinhua 3 achieved operating income of 26.428 billion yuan in the first half of 2024, an increase of 5.75% over the previous year; achieved operating profit of 1.996 billion yuan, an increase of 12.91% over the previous year; and achieved net profit of 1.82 billion yuan.
By business, the revenue of the three domestic government enterprises of Xinhua was 20.212 billion yuan, up 8.31% year on year; domestic operator business revenue was 5.019 billion yuan; and international business revenue was 1.198 billion yuan. Among them, the revenue from the independent channel business of H3C brand products and services was 0.416 billion yuan, an increase of 61.22% year on year.
Lingsai intelligent computing solutions lead the full stack, and “AI for ALL” empowers industry applications. During the reporting period, the company gave full play to the multiplier effect of computing power x connectivity, focusing on continuous technological and product innovation around efficient multiple computing power supply, high-quality network connectivity, intelligent storage, cloud and intelligence, active security, intelligent operation and maintenance, and intelligent energy consumption management. It released a full-stack leading Lingxi intelligent computing solution, and deepened the implementation of AIGC's technological innovation. Under the leadership of the “AI for ALL” strategy, Xinhuasan empowers industry applications with AI technology, and the company continues to lead the market share of many products. According to IDC data, 2024Q1 has the largest market share in China's Ethernet switch, enterprise network switch, and campus switch market share, and the second largest market share in China's data center switch market.
Investment advice: Considering the pace of downstream demand release, we adjusted the profit forecast. We expect net profit to be 2.541/3.034/3.498 billion yuan in 2024-2026 (2.702/3.179 billion yuan before 2024-2025); corresponding growth rates are 20.8%/19.4%/15.3%, respectively. In terms of valuation, referring to comparable company valuations and the company's historical valuation level (the historical PE hub in the past 5 years is around 32.31x), the company is given a PE valuation of 30 times in 2024, corresponding to a target price of about 26.7 yuan, maintaining the “recommended” rating.
Risk warning: There is uncertainty about equity acquisitions; the pace of downstream demand release is slowing down; overseas market expansion falls short of expectations.
