FII(601138) 上海证券·2024-07-02 02:00Investment Rating - The report initiates coverage on the company with a "Buy" rating [3] Core Views - The company is a leader in intelligent manufacturing and industrial internet solutions, with a global presence across 12 countries and regions [3] - The company is well-positioned to benefit from the AI development wave, particularly through its deep collaboration with North American clients [3] - The industrial internet sector is expected to continue growing, driven by policy support and the company's differentiated service strategies [3] - The communication market is under short-term pressure, but the company has made significant progress in high-speed switch production, with 100G, 200G, and 400G switches already in mass production and 800G switches entering the NPI phase [3] Business Overview Intelligent Manufacturing and Industrial Internet - The company is a global leader in intelligent manufacturing and industrial internet solutions, with a "2+2" strategy focusing on intelligent manufacturing, industrial internet, big data, and robotics [8] - The company has a cross-regional production layout and serves over 50 major clients with industrial internet and smart production solutions [9] - The company's revenue has grown from CNY 272.8 billion in 2015 to CNY 476.34 billion in 2023, with a CAGR of 7.22% [12] - The company's industrial internet business, although small in revenue share (0.35% in 2023), has the highest gross margin, close to 50% [14] Cloud Computing - The company's cloud computing business is expected to be a key driver of growth, with revenue projected to grow from CNY 264.26 billion in 2024 to CNY 416.34 billion in 2026 [41] - The company has a strong partnership with NVIDIA, being the exclusive supplier for A100 and H100 boards and the latest GPU HPC platform [19] - The company's modular server development capabilities are highlighted, with the launch of the world's first modular server in 2022 [18] Communication and Mobile Network Equipment - The communication and mobile network equipment business is expected to stabilize, with revenue projected to remain flat at CNY 298.5 billion from 2024 to 2026 [41] - The company has achieved mass production of 100G, 200G, and 400G high-speed switches, with 800G switches entering the NPI phase [39] Financial Projections - Revenue is projected to grow from CNY 565.82 billion in 2024 to CNY 717.95 billion in 2026, with net profit attributable to shareholders expected to increase from CNY 27.42 billion in 2024 to CNY 35.67 billion in 2026 [3] - The company's EPS is expected to grow from CNY 1.38 in 2024 to CNY 1.80 in 2026 [3] - The company's P/E ratio is expected to decrease from 19.85x in 2024 to 15.26x in 2026, below the industry average [45] Valuation - The company's valuation is considered attractive, with a P/E ratio lower than the industry average for 2025 and 2026 [45] - The company's P/B ratio is expected to decrease from 3.53x in 2024 to 2.94x in 2026 [3]