Hygon Information Technology (SH:688041) Huafu Securities·2024-08-15 06:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the market benchmark index within the next six months [15]. Core Views - The company's H1 2024 results slightly exceeded the forecast median, with revenue reaching 3.763 billion yuan, a year-on-year increase of 44.08% [2]. - The company is well-positioned to benefit from the domestic demand for computing power driven by the national integrated computing network and the "East Data West Computing" initiative [3]. - The company has made significant progress in adapting its products to AI large models, including the recent adaptation to Tongyi Qianwen, showcasing its advancements in the AI field [4]. Summary by Sections Financial Performance - For H1 2024, the company achieved a net profit of 853 million yuan, a year-on-year increase of 25.97% [2]. - The gross margin for H1 2024 was 63.43%, showing a year-on-year increase of 0.56 percentage points [2]. - The company expects to achieve revenues of 8.699 billion yuan in 2024, with a projected net profit of 1.839 billion yuan [5]. Market Opportunities - The report highlights the growing demand for computing power in various sectors, including internet, finance, and telecommunications, with over 30 cities in China building or planning intelligent computing centers [3]. - The anticipated procurement of AI servers by major telecom operators indicates a significant opportunity for the company in the domestic computing chip market [3]. Product Development - The company has rapidly increased its R&D personnel from 1,283 at the end of 2022 to 1,855 by H1 2024, indicating a strong focus on product iteration and innovation [4]. - The successful adaptation of its products to major AI models positions the company as a leader in the domestic AI computing landscape [4].