LCXX(000977) Guohai Securities·2024-11-01 14:13Investment Rating - The investment rating for the company is "Buy" (maintained) [1][4][8] Core Views - The company reported a revenue of 831.26 billion yuan for the first three quarters of 2024, representing a year-on-year increase of 72.83%. The net profit attributable to shareholders was 12.94 billion yuan, up 64.53% year-on-year. In Q3 2024, revenue reached 410.62 billion yuan, a 76.24% increase year-on-year, driven by increased demand for infrastructure related to AI and general servers [1][4] - The company plans to acquire 100% equity of a network technology company for 293 million yuan, which is expected to enhance its product line in network technology and align with its smart computing business [3][4] - The company is positioned to benefit from the global digitalization and intelligence trends, with projected revenues of 1006.45 billion yuan, 1351.65 billion yuan, and 1707.03 billion yuan for 2024, 2025, and 2026 respectively [4][6] Summary by Sections Financial Performance - For Q3 2024, the company achieved a gross margin of 5.62%, down 2.20 percentage points year-on-year, and a net profit margin of 1.71%, down 0.30 percentage points year-on-year. The gross margin is under pressure due to a higher proportion of lower-margin internet clients [1][4] - The company’s inventory at the end of Q3 2024 was 385.09 billion yuan, an increase of 66.04 billion yuan from the end of H1 2024, primarily to ensure supply chain stability [2][4] Market Position and Growth - The company’s stock performance has outpaced the CSI 300 index, with a 12.7% increase over the past month and a 59.7% increase over the past year [1][4] - The company is expected to see continued growth in AI computing capital expenditures and a recovery in general server demand following a destocking cycle in 2023 [1][4] Future Outlook - The company forecasts a net profit of 22.07 billion yuan, 30.56 billion yuan, and 38.15 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 1.50 yuan, 2.08 yuan, and 2.59 yuan [4][6] - The company’s P/E ratios are projected to be 31, 23, and 18 for the years 2024, 2025, and 2026 respectively, indicating a favorable valuation outlook [4][6]