Wangsu Science & Technology (300017) 民生证券·2024-08-20 13:09Investment Rating - The report maintains a "Recommend" rating for the company, with a target price of 7.05 yuan as of August 20, 2024 [2][3] Core Views - The company's overseas growth trend remains strong, with a focus on expanding its competitive advantage in international markets, particularly in Southeast Asia [2] - The company is deepening its presence in edge computing and security services, aligning with the "14th Five-Year Plan" and the growing demand for digital transformation [2] - The company is actively embracing AIGC (Artificial Intelligence Generated Content) and integrating AI into its product development and operational processes [2] - The report forecasts net profit attributable to the parent company of 630 million yuan, 720 million yuan, and 830 million yuan for 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 27x, 24x, and 21x [2][3] Financial Performance Summary - In 1H24, the company achieved revenue of 2.30 billion yuan, a slight decrease of 1.1% YoY, while gross profit increased by 5.3% YoY to 730 million yuan [2] - Net profit attributable to the parent company grew by 15.1% YoY to 297 million yuan, with non-GAAP net profit increasing by 14.7% YoY to 213 million yuan [2] - In 2Q24, revenue increased by 1.9% YoY and 5.4% QoQ to 1.18 billion yuan, with net profit attributable to the parent company rising by 14.6% QoQ to 159 million yuan [2] Business Highlights - Overseas CDN projects contributed a profit of 71.78 million yuan in 1H24, driven by the company's global node resources and self-developed technology platform [2] - The company's CDN and edge computing business saw a 1.95 percentage point increase in gross margin in 1H24, supported by ongoing investments in platform construction and node upgrades [2] - The cloud security business generated a profit of 25.82 million yuan in 1H24, with the company continuing to expand its security solutions and promote overseas security services [2] Financial Forecasts - Revenue is expected to grow by 11.8% in 2024 to 5.26 billion yuan, with further growth of 11.8% and 8.1% projected for 2025 and 2026, respectively [3][6] - Net profit attributable to the parent company is forecasted to increase by 2.3% in 2024 to 627 million yuan, followed by growth of 14.0% and 15.9% in 2025 and 2026, respectively [3][6] - The company's gross margin is expected to remain stable, with forecasts of 33.44%, 33.58%, and 33.85% for 2024, 2025, and 2026, respectively [6] Valuation Metrics - The company's P/E ratio is projected to decline from 27x in 2024 to 21x in 2026, reflecting expected earnings growth [3][7] - The P/B ratio is forecasted to remain steady at 1.8x in 2024 and 2025, before slightly decreasing to 1.7x in 2026 [7] - The EV/EBITDA ratio is expected to decrease from 18.62x in 2024 to 15.75x in 2026, indicating improving valuation metrics [7]