Digital China(000034) 华龙证券·2024-11-01 13:52Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2][6]. Core Views - The company has shown stable revenue growth in the first three quarters of 2024, with total operating revenue reaching 91.571 billion yuan, an increase of 8.81% year-on-year, and a net profit attributable to shareholders of 0.894 billion yuan, up 5.04% year-on-year [2][3]. - The growth is primarily driven by the trends in "Xinchuang" (domestic innovation) and AI, with significant increases in revenue from cloud services and proprietary brand businesses, which grew by 47% and 32% respectively [4][3]. - The overall gross margin of the company improved by 0.6% year-on-year, with gross profit increasing by 24% [3]. Financial Performance Summary - For the first three quarters of 2024, the company achieved total operating revenue of 91.571 billion yuan, a year-on-year increase of 8.81%, and a net profit of 0.894 billion yuan, up 5.04% year-on-year [2][3]. - The gross margin for the overall business increased by 0.6% year-on-year, with gross profit rising by 24% [3]. - The revenue from cloud services and software business saw a significant increase, with a gross margin improvement of 6.3% and gross profit growth of 126% [4]. - The proprietary brand business benefited from breakthroughs in sectors such as finance, government, and telecommunications, with revenue from Xinchuang business growing by 56% and AI server business revenue increasing by 226% [4]. Market Data - As of October 30, 2024, the current stock price is 33.35 yuan, with a market capitalization of approximately 22.33 billion yuan [4][8]. - The company’s earnings per share (EPS) for 2024 is projected to be 2.11 yuan, with corresponding price-to-earnings (P/E) ratios of 15.8, 12.9, and 10.6 for the years 2024, 2025, and 2026 respectively [5][11].