互联网行业需求高增。前三季度互联网、企业客户的智算中心建设规模整体增长比较明显，互联网厂商对数据中心交换机的需求大幅增长，同时金融、交通、电力能源等行业对交换机的需求也有不同程度增长。目前，数据中心交换机的主流产品以400G 为主，并且今年已经全面发力，同时800G 交换机产品也已经开始小规模发货，公司预计明年依然有较好的上涨空间。Incident: The company's revenue for the first three quarters was 58.839 billion yuan, +6.56% YoY, net profit 1.582 billion yuan YoY, +2.65% YoY, net profit before deducting 1.388 billion yuan, YoY +6.91%, gross profit margin 17.59%, -2.31pct YoY, net profit margin 2.69%, YoY -0.10pct.
The company's 24Q3 revenue was 20.889 billion yuan, +8.97% YoY, -0.27% month-on-month, net profit 0.581 billion yuan, +12.06% YoY, -0.92% month-on-month, net profit 0.495 billion yuan after deducting net profit of 0.495 billion yuan, YoY +9.00%, month-on-month -10.13%, gross profit margin 14.97%, YoY -4.14pct, YoY -3.31pct, net profit margin 2.78%, YoY +0.08pct, YoY -0.02pct.
Xinhua's revenue for the first three quarters of the third quarter was 40.266 billion yuan, +7.18%; of these, domestic government and enterprise revenue was 31.683 billion yuan, +12% year-on-year, domestic operators' business revenue was 6.693 billion yuan, and international business revenue was 1.89 billion yuan, +16.34%. In the international business, revenue from the independent channel business of H3C brand products and services was 0.685 billion yuan, +69.26% over the same period last year. In September, the company completed a further acquisition of 30% of Xinhua's shares, increasing its shareholding ratio from 51% to 81%.
The Internet industry is in high demand. The overall scale of intelligent computing center construction for the Internet and enterprise customers increased significantly in the first three quarters. Internet manufacturers' demand for data center switches increased dramatically, while demand for switches in the financial, transportation, power and energy industries also increased to varying degrees. Currently, the mainstream products of data center switches are mainly 400G, and full strength has been achieved this year. At the same time, small-scale delivery of 800G switch products has begun, and the company expects that there will still be good room for growth next year.
Inventory at the end of Q3 was 32.74 billion, +41.54% year-on-year, mainly due to increased demand for IT product procurement and preparation brought about by the intelligent computing business in the first three quarters. In order to maintain a competitive advantage, the company made advance reserves for some products and devices with large price fluctuations. At the same time, benefiting from the increase in white-label server orders, the company's products have improved. Contract debt was 10.797 billion, +46.31% YoY.
The company's 24Q3 sales, management, finance and R&D expenses rates were 4.34%, 1.20%, 0.28%, and 6.53%, respectively, +0.11pct, +0.18pct, -1.03pct, and -0.84pct, respectively.
Profit forecasting and investment advice. We expect Ziguang's revenue for 2024-2026 to be 83.348 billion yuan, 95.859 billion yuan, 108.222 billion yuan, net profit to mother of 2.347 billion yuan, 2.836 billion yuan, 3.306 billion yuan, and EPS 0.82 yuan, 0.99 yuan, and 1.16 yuan, respectively. Referring to comparable company valuations, the 2025 PE range is 30-35 times, corresponding to a reasonable value range of 29.75 yuan - 34.71 yuan, and a “superior to the market” rating is given.
Risk warning. Technology and product development risks; macroeconomic environment change risks; operational risks; human resources risks.
