LCXX(000977) KAIYUAN SECURITIES·2024-11-02 15:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is a leader in AI servers and is expected to benefit from the increasing demand for AI computing power, leading to an upward revision of net profit forecasts for 2024-2026 to CNY 2.41 billion, CNY 3.06 billion, and CNY 3.70 billion respectively [1] - The earnings performance aligns with expectations, showcasing strong business momentum as indicated by inventory and accounts payable growth [2] Financial Performance Summary - For the first three quarters of 2024, the company achieved operating revenue of CNY 83.13 billion, a year-on-year increase of 72.26%, and a net profit attributable to shareholders of CNY 1.29 billion, up 67.05% [2] - The gross profit margin for the first three quarters was 6.70%, a decrease of 2.97 percentage points year-on-year, primarily due to the increased revenue share from AI servers [2] - As of the end of Q3, inventory increased by 101.47% compared to the beginning of the year, and accounts payable rose by 305.32%, reflecting the expansion of business scale and increased operational stocking [2] Product and Technology Development - The company is enhancing its full-stack capabilities in algorithms, computing power, data, and connectivity to promote the implementation of AI applications [3] - New AI server products, including the NF5698G7, and a generative AI storage solution have been launched to meet the stringent requirements of large model applications [3] Financial Projections - The projected operating revenue for 2024 is CNY 99.63 billion, with a year-on-year growth of 51.3% [4] - The projected earnings per share (EPS) for 2024 is CNY 1.64, with corresponding price-to-earnings (P/E) ratios of 26.7, 21.0, and 17.4 for 2024, 2025, and 2026 respectively [1][4] Market Position - The company holds a significant market position as a domestic leader in AI servers, which supports the maintained "Buy" rating [1]