Envicool(002837) 国泰君安·2024-10-27 10:13Investment Rating - Maintains an "Overweight" rating for the company [3][4] - Target price raised to 38.7 RMB, based on a 43x PE multiple for 2025 [3][4] Core Views - The company's Q3 2024 results met expectations, with revenue of 2.872 billion RMB (+38.61% YoY) and net profit of 353 million RMB (+67.79% YoY) [3] - AI-driven demand for computing power is accelerating, positioning the company's liquid cooling solutions as a key growth driver [3] - The company's Coolinside liquid cooling cabinets and end-to-end solutions provide a competitive edge in the liquid cooling market [3] - Cost control measures have improved profitability, with a net profit margin of 12.25% (+2.37pct YoY) [3] Financial Performance - Q3 2024 revenue reached 1.159 billion RMB (+39.16% YoY), with net profit of 169 million RMB (+43.06% YoY) [3] - Gross margin remained stable at 31.73% (-0.9pct YoY) despite rising commodity prices [3] - Sales, management, and financial expense ratios were 6.57% (+2.06pct YoY), 4.4% (-0.49pct YoY), and 0.03% (-0.04pct YoY), respectively [3] Industry and Market Context - AI technology is driving higher computing density, increasing demand for liquid cooling solutions in data centers [3] - The company is among 40+ global infrastructure providers innovating on NVIDIA's Blackwell platform [3] - The liquid cooling market is expected to grow significantly due to advancements in AI and data center technologies [3] Valuation and Forecasts - 2024-2026 EPS forecasts are 0.68, 0.90, and 1.16 RMB, respectively [3] - The company's 2025 PE multiple is set at 43x, higher than the industry average of 42.16x [3] - Revenue is projected to grow from 4.646 billion RMB in 2024 to 7.801 billion RMB in 2026 [9] Stock Performance - The stock price has risen 46% over the past month and 65% over the past year [8] - Current price is 31.70 RMB, with a 52-week range of 17.97-35.40 RMB [5][4]