ZFINFO(SZ:300659) Guotai Junan Securities·2024-10-27 09:43Investment Rating - The report initiates coverage with a rating of "Buy" for the company [4][9]. Core Views - The company is a leader in confidentiality and security, experiencing a rebound in performance, supported by increasing policies and a recovering growth rate in the cybersecurity industry. The diverse product system is expected to achieve better-than-expected development [2][21]. Financial Summary - The company’s revenue is projected to grow from 9.54 billion in 2024 to 18.44 billion in 2026, with net profits expected to shift from a loss of 0.68 billion in 2024 to a profit of 3.58 billion in 2026. The EPS is forecasted to improve from -0.26 in 2024 to 1.38 in 2026 [9][12][13]. - The company’s market capitalization is currently 4,474 million, with a current stock price of 17.18 and a target price set at 25.73, indicating significant upside potential [4][5]. Industry Context - The cybersecurity industry in China is expected to grow at a compound annual growth rate (CAGR) of 7.7% from 2023 to 2026, reaching a market size of 80 billion by 2026. This growth is driven by the implementation of revised laws and regulations [9][21]. - The company has maintained a strong market position, ranking 11th in the cybersecurity industry for two consecutive years, and is recognized for its leading capabilities in the confidentiality sector [21][22]. Product and Service Overview - The company offers a comprehensive range of products, including host and network security, data security, safety supervision platforms, and inspection products, which are all compatible with domestic hardware and software [22][23]. - The revenue from network security products is expected to recover significantly, with growth rates projected at 4.19% in 2024, 59.43% in 2025, and 40.66% in 2026 [12][14].