Digital China(SZ:000034) Guohai Securities·2024-09-02 14:39Investment Rating - The report maintains a "Buy" rating for the company [1][4][6] Core Insights - The company achieved significant growth in Q2 2024, driven by AI and its proprietary brand, with a revenue of 332.91 billion yuan, representing a year-on-year increase of 16.87% [2] - The company's self-owned brand products saw a robust revenue growth of 45.5% in H1 2024, reaching 2.66 billion yuan [3] - The company is expanding its presence in the Xinchuang (信创) industry, with revenue from this segment growing by 73.3% to 2.19 billion yuan in H1 2024 [3] Financial Performance Summary - In H1 2024, the company reported total revenue of 625.62 billion yuan, a year-on-year increase of 12.52%, and a net profit attributable to shareholders of 5.09 billion yuan, up 17.52% [1][2] - The gross profit margin for self-owned brand products improved to 10.5%, an increase of 1.7 percentage points [3] - The company's R&D expenditure reached 190 million yuan, a 25% increase year-on-year, focusing on AI applications and server performance [2][4] Market Position and Strategy - The company has successfully established a three-product line in the Xinchuang industry, covering servers, network products, and security products [3] - The company won a 10.53% share in the procurement bid for China Mobile's new intelligent computing center, amounting to approximately 2 billion yuan [3] - The IT distribution and value-added services segment maintained a growth trend, with revenue of 598.3 billion yuan in H1 2024, a year-on-year increase of 9.8% [4] Earnings Forecast - The company is projected to achieve revenues of 1,295.82 billion yuan, 1,397.73 billion yuan, and 1,498.02 billion yuan for the years 2024, 2025, and 2026 respectively, with net profits of 14.37 billion yuan, 17.30 billion yuan, and 20.34 billion yuan [4][5][6]