1. It is estimated that in the 80 million unit market, Xinchuang PC is expected to replace the peak period of 2020 as the first year of Xinchuang. At the party and government level, the “2+8+N” system has begun to comprehensively upgrade Xinchuang products, and the industry of Xinchuang, represented by finance and telecommunications, has also entered the large-scale application stage. Under the exemplary role of the Party and government, the Xinchuang industry is accelerating its expansion into the remaining 8 key industries. According to Chengmai Technology's official account, “By 2027, the total number of Xinchuang computer markets required for the national credit creation process will reach 90 million units. Currently, the party, government and eight major industries have built about 10 million units. This means that there are still 80 million units in the market. The next three years or more will definitely be the peak period for credit creation.” 2. Haiguang 3000 series CPUs are mainly used in workstations, etc., and are expected to benefit from Xinchuang PC chip volume. According to different market requirements, Haiguang processors are divided into three major product series: 7000, 5000, and 3000. Among them, the 3000 series is a cost-effective processor for multiple scenarios, mainly used in entry-level servers, workstations, industrial control and other markets. The performance of the company's 3000 series CPU is comparable to the Intel Zhiqiang E3 processor. It supports mainstream operating systems, databases, virtualization platforms or cloud computing platforms at home and abroad. It is effectively compatible with millions of existing system software and application software based on x86 instruction sets, and has excellent ecosystem advantages. Furthermore, according to the “Safety and Reliability Assessment Results” announcement, Haiguang's four CPUs were selected for the first and second phase of the catalogue respectively, and the company's CPU share in the Xinchuang field is expected to continue to increase.

3. District-level Xinchuang PCs replaced or surpassed 11 million units, increasing Haiguang's 24-26 revenue growth rate by 3/5/2pct. According to the “China Statistical Yearbook 2022” published by the National Bureau of Statistics, the number of people employed in public administration, social security and social organization units in China reached 19.858 million. Considering factors such as ownership, according to our estimates, the number of PCs owned in the district, county and township party and government sink markets is about 11.21 million units. Assuming that Haiguang Information's market share is 30% and the unit price of Haiguang 3000 series CPUs is calculated at 600 yuan. If large-scale replacement starts in '25 and the 11.21 million Taiwan Xinchuang PC market share is gradually absorbed over the next three years, it is expected to contribute an average annual revenue of 0.673 billion yuan over 24-26. We raised our previous profit forecast. The company's 2024-2026 revenue forecast was 8.631/12.082/16.056 billion yuan (the original forecast was 8.431/11.382/14.938 billion yuan for 24-26), and the 24-26 growth rate was 3.33/4.98/1.65pct respectively; net profit forecast to mother was 1.737/2.336/3.104 billion yuan (the original forecast was 1.702/2.219 for 24-26) /$2.912 billion), maintaining a “buy” rating.

Risk warning: risk of R&D not meeting expectations, risk of sustainable operating capacity, risk of rising raw material costs