SW-TECH(SZ:300113) KAIYUAN SECURITIES·2024-09-20 05:40Investment Rating - The report assigns a "Buy" rating for the company, Shunwang Technology [4] Core Insights - The company has diversified its business into four main areas: esports, ChinaJoy, computing power cloud, and AI, leveraging its advantages in internet cafes to establish a solid foundation for growth [4][11] - The esports industry is in a growth phase, with the upcoming esports Olympics in 2025 expected to boost demand for esports venues and consumption [5][18] - The 2024 ChinaJoy event saw record attendance, indicating a strong recovery in the interactive entertainment sector, which may further enhance the company's revenue streams [6][21] - The company's computing power cloud and AI services are anticipated to create a second growth curve, supported by its extensive edge computing infrastructure [7][25] Summary by Sections 1. Company Overview - Shunwang Technology started with internet cafe management systems and has expanded into esports, ChinaJoy, computing power, and AI [11] - The company has a concentrated ownership structure, with the largest shareholder holding 31.71% of the shares [14] 2. Financial Analysis - The company reported a revenue of 1.433 billion yuan in 2023, a year-on-year increase of 27.5%, and successfully turned a profit after a loss in 2022 [15][36] - The revenue from network advertising and value-added services accounted for 64% of total revenue in 2023, showing a significant increase [17] 3. Esports Industry - The number of internet service venues in China reached 77,000 by Q4 2023, marking a 0.67% increase, indicating a recovery in the industry [5][18] - The first esports Olympics is expected to attract a large audience, enhancing the demand for esports-related services [18][19] 4. ChinaJoy Event - The 2024 ChinaJoy event attracted over 367,000 attendees, the highest in its history, showcasing the high demand for interactive entertainment [6][21] - The introduction of the ChinaJoy Music Festival aims to create new monetization opportunities in the entertainment sector [23] 5. Computing Power and AI - The company has established a comprehensive computing power service ecosystem, integrating edge computing and AI capabilities [7][25] - The domestic computing power market is projected to grow significantly, providing ample opportunities for the company's computing power cloud business [28][29]