VGT(SZ:300476) Huafu Securities·2024-09-09 03:54Investment Rating - The report maintains a "Buy" rating for Shenghong Technology, indicating an expected relative price increase of over 20% compared to the market benchmark within the next six months [13]. Core Insights - Shenghong Technology's H1 2024 performance shows rapid growth, with revenue reaching 4.855 billion yuan, a year-on-year increase of 32.29%, and a net profit of 459 million yuan, up 33.23% [1]. - The company is successfully mass-producing high-density interconnect (HDI) boards for AI servers, which are projected to capture a significant share of the global server market, with AI server revenue expected to reach $187 billion in 2024, growing at a rate of 69% [1]. - Shenghong Technology has made substantial investments in R&D, totaling 198 million yuan in H1 2024, focusing on advanced technologies for AI servers and related products [1]. Financial Performance - For H1 2024, the company reported a revenue of 4.864 billion yuan in Q2, reflecting a year-on-year growth of 28.84% and a quarter-on-quarter increase of 3.02% [1]. - The net profit for Q2 2024 was 249 million yuan, marking a year-on-year increase of 13.60% and a quarter-on-quarter growth of 18.99% [1]. - The financial forecast estimates revenues of 11.203 billion yuan, 13.477 billion yuan, and 16.038 billion yuan for 2024, 2025, and 2026 respectively, with net profits projected at 1.131 billion yuan, 1.527 billion yuan, and 1.837 billion yuan for the same years [2][7]. Strategic Developments - The company is expanding its overseas production capabilities, having completed the acquisition of MFS and planning further investments in Thailand and Vietnam to enhance its PCB product offerings [1]. - Shenghong Technology is focusing on high-end AI data center products, successfully launching several advanced HDI and optical module products into mass production [1]. - The company is strategically positioned in the AI server market, with ongoing collaborations with top global clients and a robust pipeline of products in development [1].