Vertiv(US:VRT) Tianfeng Securities·2024-10-22 12:43Investment Rating - The report assigns an initial investment rating of "Buy" for Vertiv (VRT) with a 6-month outlook [1]. Core Insights - Vertiv is positioned to benefit from the data center investment wave, providing platform-based thermal and power solutions. The company has shown rapid revenue growth, with 2023 revenue reaching $6.863 billion, a year-on-year increase of 20.59% [1][17]. - The data center thermal management market is expected to grow significantly, with a projected CAGR of 15.82% from 2024 to 2029, and the liquid cooling segment is anticipated to grow at a CAGR of 25.44% during the same period [1][2]. - The company has established partnerships with major players like Nvidia and Intel, enhancing its market position in liquid cooling solutions [1][2]. Financial Analysis - In 2023, Vertiv's revenue reached $6.863 billion, marking a 20.59% increase compared to the previous year. The growth was driven by both increased sales volume and pricing power, as the company overcame supply chain challenges [17][19]. - The energy management segment accounted for 33% of total sales, while thermal management contributed 30%. Service support and IT systems made up 22% and 10% of revenue, respectively [18][19]. - Vertiv's operating profit for 2023 was $932.8 million, a significant increase from $219.1 million in 2022, reflecting a 325.74% year-on-year growth [24][25]. - The GAAP net profit for 2023 was $460.2 million, a remarkable increase of 500.78% compared to the previous year, driven by strong market demand and improved pricing [26][27]. Market Overview - The data center construction market is projected to grow from $259.97 billion in 2023 to $348.23 billion by 2028, with a CAGR of 6.02% [31][32]. - Vertiv's market share in the data center sector is substantial, with 75% of its revenue derived from this segment, indicating a strong customer base in data centers [19][20].