FII(601138) 民生证券·2024-07-22 05:00Investment Rating - The report maintains a "Recommend" rating for the company, with a target price of 24.66 RMB as of July 19, 2024 [2][57] Core Views - The company is a global leader in high-end intelligent manufacturing and technology service integration solutions, with core businesses in communication and mobile network equipment, cloud computing, and industrial internet [1][6] - The company has been actively transforming towards intelligent manufacturing and industrial internet since 2013, leveraging opportunities from the digital economy and new infrastructure development [6] - The company's cloud computing business is the fastest-growing segment, with AI server demand expected to drive significant growth in the coming years [8][22] - The company is a leading supplier of AI servers, with a 40% market share expected in 2024, and is well-positioned to benefit from the rapid growth in AI-related demand [1][22] - The company's industrial internet business, with a high gross margin, has helped establish 9 world-class lighthouse factories, contributing to its profitability [8][13] Business Segments Communication and Mobile Network Equipment - This segment is the company's largest revenue contributor, with products including high-speed switches, routers, and terminal precision structural components [7] - The segment saw a 5.81% decline in revenue in 2023 but achieved a gross margin of 9.80%, up 0.55 percentage points year-over-year [13][14] - The company is a major supplier to global clients such as Cisco, HPE, Huawei, and Apple, with a market share exceeding 75% in high-speed switches [50] Cloud Computing - The cloud computing segment is the company's fastest-growing business, with AI servers contributing 30% of the segment's revenue in 2023, up from 20% in 2022 [8][37] - The company is a leading ODM supplier for AI servers, with a 40%-50% share in NVIDIA's AI server assembly, and is expected to benefit from the rapid growth in AI server demand [1][22] - The segment's gross margin reached 5.08% in 2023, the first time it surpassed 5% since the company's IPO, driven by the increasing share of high-margin AI server business [13][14] Industrial Internet - The industrial internet segment is the company's highest-margin business, with a gross margin of 49.81% in 2023 [13][14] - The company has helped establish 9 world-class lighthouse factories and provides digital transformation services for large enterprises, SMEs, and industrial clusters [8] - The segment's revenue declined by 13.89% in 2023, but the company expects growth in the coming years due to increased demand for industrial equipment upgrades [50][51] Financial Performance - The company reported revenue of 476.34 billion RMB in 2023, a 6.94% year-over-year decline, with a gross margin of 8.06% and a net margin of 4.41% [1][13] - The company's net profit in 2023 was 21.04 billion RMB, a 4.82% year-over-year increase, with a gross profit of 38.38 billion RMB, up 3.26% year-over-year [13][16] - The company's operating cash flow in 2023 increased by 180.39% year-over-year, reaching 20.84 billion RMB in Q1 2023 [20] Future Outlook - The company is expected to achieve revenue of 558.6 billion RMB, 652.2 billion RMB, and 736.1 billion RMB in 2024, 2025, and 2026, respectively, with net profits of 26.0 billion RMB, 36.4 billion RMB, and 41.8 billion RMB [1][57] - The company's AI-related business is expected to contribute 40% of its cloud computing revenue in 2024, with AI servers accounting for 40% of the global market share [37] - The company is well-positioned to benefit from the growing demand for AI servers, liquid cooling solutions, and high-speed switches, driven by the rapid development of AI and cloud computing [22][33][50]