SCC(002916) Southwest Securities·2024-09-06 01:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 120.68 CNY over the next six months [1][3]. Core Insights - The company achieved a revenue of 8.32 billion CNY in the first half of 2024, representing a year-on-year growth of 37.9%, and a net profit attributable to shareholders of 990 million CNY, up 108.3% year-on-year [2]. - The gross margin for the first half of 2024 was 26.2%, an increase of 3.3 percentage points year-on-year, while the net profit margin rose by 4.0 percentage points to 11.9% [2]. - The company is focusing on high-value products such as AI servers and high-end communication boards, which are expected to drive profitability [2]. - The report highlights the scarcity of capacity in the data communication sector and the ongoing improvement in profit structure [2]. Summary by Sections Performance Summary - In H1 2024, the company reported revenue of 8.32 billion CNY, a 37.9% increase year-on-year, and a net profit of 990 million CNY, reflecting a 108.3% growth [2]. - The gross margin improved to 26.2%, and the net profit margin reached 11.9%, indicating enhanced profitability [2]. Business Outlook - The company is expected to benefit from the increasing demand for AI servers and high-end communication products, which will positively impact the PCB business [2]. - The report anticipates a steady increase in production capacity and sales for the ABF substrate project over the next 3-5 years, potentially generating over 6 billion CNY in revenue [2][3]. Financial Projections - The projected earnings per share (EPS) for 2024-2026 are 4.31 CNY, 5.06 CNY, and 5.92 CNY, respectively, with corresponding price-to-earnings (PE) ratios of 23x, 19x, and 16x [3][10]. - The company is expected to achieve a compound annual growth rate (CAGR) of 29.5% in net profit over the next three years [3].