LCXX(000977) Minsheng Securities·2024-11-01 05:39Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook for its stock performance in the coming years [2][4]. Core Insights - The company achieved a record high revenue of 831.26 billion yuan for the first three quarters of 2024, representing a year-on-year growth of 72.26%. The net profit attributable to shareholders reached 12.94 billion yuan, up 67.05% year-on-year, while the net profit excluding non-recurring items surged by 176.67% to 11.55 billion yuan [2]. - In Q3 2024, the company reported revenue of 410.62 billion yuan, marking a 76.05% increase year-on-year, with a gross margin of 5.6%. The demand for servers is primarily driven by internet clients investing in AI computing power, which has affected the overall gross margin due to lower margins from these clients compared to traditional industries [2]. - The company demonstrated excellent cost control, with a year-on-year increase in net profit of 51.09% to 6.97 billion yuan in Q3 2024. The net profit margin for the quarter improved by 0.51 percentage points compared to Q2 2024 [2]. - Inventory levels reached a historical high of 385.09 billion yuan, reflecting ongoing high demand in the industry. The company also recognized credit impairment losses of 4.08 billion yuan, which are expected to be reversed in Q4 2024 [2]. - The forecast for net profit attributable to shareholders for 2024-2026 is 25.14 billion yuan, 31.34 billion yuan, and 36.78 billion yuan, respectively. The current market capitalization corresponds to valuation multiples of 27, 22, and 19 times for the respective years, suggesting room for valuation improvement given the strong demand for AI computing [2]. Financial Summary - For 2024, the company is projected to have total revenue of 101.28 billion yuan, with a growth rate of 53.77%. The net profit attributable to shareholders is expected to be 25.14 billion yuan, reflecting a growth rate of 41.04% [5]. - The earnings per share (EPS) is forecasted to increase from 1.21 yuan in 2023 to 1.71 yuan in 2024, with a price-to-earnings (PE) ratio decreasing from 39 to 27 over the same period [5]. - The company's total assets are expected to grow from 48.12 billion yuan in 2023 to 69.71 billion yuan in 2024, indicating a strong asset base to support future growth [5].