UNIS(000938) 华创证券·2024-08-27 10:43Investment Rating - The report maintains a "Recommend" rating for Unisplendour Corporation (000938) with a target price of 26.7 RMB, compared to the current price of 19.28 RMB [1] Core Views - Unisplendour's performance showed significant quarter-over-quarter improvement, with H3C (a subsidiary) delivering stable results [1] - Revenue and profit improved notably in Q2 2024, with AIGC applications driving growth [2] - H3C's domestic government and enterprise business grew by 8.31% YoY, while its international business saw a 61.22% YoY increase in H3C branded products and services [2] - The company's Lingxi Intelligent Computing Solution is leading in the industry, with strong market share in Ethernet switches and data center switches [2] - The report adjusted the profit forecast for 2024-2026, expecting net profit attributable to the parent company to grow at 20.8%, 19.4%, and 15.3% respectively [2] Financial Performance - In H1 2024, Unisplendour achieved revenue of 37.951 billion RMB, a 5.29% YoY increase, with net profit attributable to the parent company of 1 billion RMB, a 2.13% YoY decrease [1] - Q2 2024 revenue was 20.945 billion RMB, a 7.32% YoY increase and 23.16% QoQ growth, with net profit attributable to the parent company of 587 million RMB, a 0.60% YoY increase and 41.82% QoQ growth [2] - H3C's revenue in H1 2024 was 26.428 billion RMB, a 5.75% YoY increase, with net profit of 1.82 billion RMB [2] - The company's gross margin in H1 2024 was 19.03%, a 1.29 pct YoY decrease, while net margin was 4.55%, a 0.45 pct YoY decrease [2] Business Highlights - Unisplendour's "AI for ALL" strategy is driving innovation in computing power, network connectivity, and intelligent storage [2] - The company holds the top market share in China's Ethernet switch, enterprise network switch, and campus switch markets, and ranks second in the data center switch market [2] - H3C's domestic government and enterprise business contributed 20.212 billion RMB in revenue, while its international business generated 1.198 billion RMB [2] Financial Forecast - Revenue is expected to grow from 86.129 billion RMB in 2024E to 108.221 billion RMB in 2026E, with YoY growth rates of 11.4%, 12.3%, and 11.8% respectively [3] - Net profit attributable to the parent company is forecasted to increase from 2.541 billion RMB in 2024E to 3.498 billion RMB in 2026E, with YoY growth rates of 20.8%, 19.4%, and 15.3% [3] - EPS is projected to grow from 0.89 RMB in 2024E to 1.22 RMB in 2026E [3] Valuation - The report assigns a 30x PE multiple for 2024, based on comparable company valuations and the company's historical PE average of 32.31x over the past five years [2] - The target price of 26.7 RMB implies a 38.5% upside from the current price of 19.28 RMB [1]