GONGJIN(603118) 东兴证券·2024-07-04 15:30Investment Rating - The report initiates coverage with a "Buy" rating for the company [15] Core Views - The company has successfully implemented its overseas capacity layout, which is expected to continue improving utilization rates [10][48] - The global demand for broadband terminal equipment is projected to grow significantly, providing a favorable environment for the company's overseas production bases [48] - The company has established a strong presence in the Ethernet switch market, with significant growth potential in overseas markets [57][79] Summary by Sections Global Capacity Layout - The company has focused on building overseas production capacity, particularly in Vietnam, which has become a key part of its global strategy [10][26] - As of the end of 2023, the total assets of the Vietnam production base reached 899 million yuan, accounting for 9% of the company's total assets [65] - The revenue from the Vietnam subsidiary was 1.889 billion yuan, contributing 22% to the company's total revenue [65] Market Potential - The global Ethernet switch market reached a size of 44.2 billion USD in 2023, growing by 20.1% year-on-year, driven by advancements in AI technology [4][96] - The company is well-positioned to capture market share in the less concentrated overseas markets compared to the domestic market [79] Financial Forecast - The company is expected to see steady revenue growth, with projected revenues of 8.332 billion, 8.864 billion, and 9.328 billion yuan for 2024, 2025, and 2026 respectively [15][84] - The forecasted net profits for the same period are 217 million, 274 million, and 315 million yuan, with corresponding P/E ratios of 24X, 19X, and 16X [15][84]