WUS(SZ:002463) Huachuang Securities·2024-07-14 13:31Investment Rating - The report maintains a "Strong Buy" rating for the company, indicating an expectation to outperform the benchmark index by over 20% in the next six months [2][16]. Core Views - The company's performance is in line with expectations, with a significant increase in net profit forecasted for the first half of 2024, driven by strong demand for high-end communication boards and the penetration of 800G switches [2]. - The company is expected to benefit from the rapid growth in AI computing demand, particularly in the context of high-speed computing servers and AI applications [2]. - The investment in technology upgrades and capacity expansion is projected to enhance the company's profitability and market position [2]. Financial Summary - The company forecasts a net profit of 1.08-1.16 billion yuan for H1 2024, representing a year-on-year increase of 119-135% [2]. - For Q2 2024, the expected net profit is 565-645 million yuan, showing a year-on-year growth of 93-121% and a quarter-on-quarter increase of 10-25% [2]. - Revenue projections for 2024-2026 are adjusted to 25.98 billion yuan, 34.72 billion yuan, and 39.74 billion yuan respectively, reflecting strong growth rates [2][3]. Market Dynamics - The demand for high-end communication boards is robust, with significant improvements in Q2 performance attributed to emerging computing scenarios driven by AI [2]. - The penetration of 800G switches is expected to accelerate, with the data center switch market projected to expand by 50% due to increased spending on AI backend networks [2]. - The company is focusing on high-end automotive board products, which are anticipated to contribute to revenue growth in the automotive sector [2]. Valuation - The target price for the company's stock is set at 54.3 yuan, with the current price at 40.25 yuan, indicating potential upside [5]. - The report suggests that the company's product iterations are likely to continue enhancing average selling prices (ASP) and profitability [2].