Digital China(SZ:000034) Soochow Securities·2024-09-03 00:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's distribution business remains solid, with strong growth in its proprietary brand business [3] - The company reported a revenue of 62.562 billion yuan in the first half of 2024, a year-on-year increase of 12.52%, and a net profit attributable to shareholders of 509 million yuan, up 17.52% year-on-year [2][3] - The company is actively expanding its AI and cloud services, with significant revenue growth in these areas [3] Summary by Sections Revenue and Profit Forecast - Total revenue forecast for 2024E is 125.973 billion yuan, with a year-on-year growth of 5.31% [2] - Net profit attributable to shareholders is forecasted to be 1.471 billion yuan in 2024E, representing a year-on-year increase of 25.57% [2] Business Performance - The IT distribution and value-added services business achieved revenue of 59.83 billion yuan in the first half of 2024, a year-on-year increase of 9.8% [3] - The microelectronics business, focusing on general-purpose and AI-specific chips, generated revenue of 9.76 billion yuan, up 39.7% year-on-year [3] - The proprietary brand product business saw revenue of 2.66 billion yuan, a year-on-year increase of 45.5% [3] AI and Cloud Services - The cloud services and software business, centered on MSP and ISV, achieved revenue of 1.44 billion yuan, a year-on-year increase of 62.7% [3] - The company launched the "Shenzhou Wenshu AI Native Empowerment Platform" in the first half of 2024 [3] Financial Metrics - The latest diluted EPS is forecasted to be 2.20 yuan per share in 2024E, with a P/E ratio of 10.95 [2] - The gross profit margin for the distribution business improved to 3.5%, up 0.3 percentage points year-on-year [3]