WUS(SZ:002463) Tianfeng Securities·2024-10-27 12:52Investment Rating - The report maintains a "Buy" rating for the company, with a target price indicating a potential upside of over 20% within the next six months [7]. Core Views - The company reported a revenue of 9.011 billion yuan for the first three quarters of 2024, representing a year-on-year growth of 48.15%, and a net profit of 1.848 billion yuan, up 93.94% year-on-year [1]. - The third quarter alone saw a revenue of 3.587 billion yuan, a 54.67% increase year-on-year, and a net profit of 708 million yuan, growing 53.66% year-on-year [1]. - The surge in revenue is primarily driven by strong orders related to AI, with AI server and HPC-related PCB products increasing their contribution to the company's enterprise communication market revenue from approximately 21.13% in 2023 to about 31.48% [2]. - The company is investing approximately 4.3 billion yuan to expand its production capacity for high-end printed circuit boards to meet AI demand, which is expected to generate an additional annual revenue of about 4.8 billion yuan upon completion [5]. Financial Performance - The gross margin for the first three quarters was 35.86%, an increase of 5.29 percentage points year-on-year, although the third quarter saw a slight decline to 34.94% due to exchange rate fluctuations [3]. - The net profit margin for the third quarter was 19.57%, a slight increase of 0.07 percentage points year-on-year [3]. - The company forecasts net profits of 2.683 billion yuan, 3.498 billion yuan, and 4.248 billion yuan for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 32, 24, and 20 [6]. Industry Trends - The report highlights that while "killer" applications for AI are not yet widespread, the long-term outlook is positive as AI applications in fields such as image processing, voice recognition, and machine vision are expected to drive significant growth in data and computing needs over the next five years [4]. - The demand for high-performance PCB solutions is anticipated to be a major growth driver in the electronic market due to the increasing computational and storage requirements of emerging AI applications [4].