Digital China(000034) 东吴证券·2024-11-03 15:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 91.6 billion yuan for the first three quarters of 2024, representing a year-on-year growth of 9%. The net profit attributable to shareholders was 0.894 billion yuan, up 5% year-on-year, which aligns with market expectations [1] - Interest expenses impacted apparent profits, but adjusted profit growth met market expectations. In Q3 2024, the company achieved a revenue of 29 billion yuan, a year-on-year increase of 1.6%. The net profit attributable to shareholders decreased by 7.93% year-on-year, primarily due to interest expenses of approximately 60 million yuan related to the Shenzhen building [1][2] - The company's self-branded product revenue grew significantly, with a 32% increase to 3.87 billion yuan. The revenue from the Xinchuang business reached 3.2 billion yuan, up 56%, while AI server revenue surged by 226% to 700 million yuan [2] - The company plans to repurchase shares worth 200-400 million yuan, reflecting confidence in its long-term development [2] Summary by Sections Financial Performance - For 2024, the company forecasts total revenue of 125.973 billion yuan, with a year-on-year growth of 5.31%. The net profit attributable to shareholders is projected to be 1.471 billion yuan, a 25.57% increase [1][3] - The company’s earnings per share (EPS) is expected to reach 2.20 yuan in 2024, with a price-to-earnings (P/E) ratio of 15.82 based on the current price [1][3] Revenue Breakdown - The IT distribution and value-added services revenue reached 879 billion yuan, maintaining both revenue and profit growth, with a gross profit margin improvement leading to a gross profit of 3.2 billion yuan, up 11% year-on-year [2] - The cloud services and software business generated 2.07 billion yuan in revenue, reflecting a 47% year-on-year growth, with a gross profit margin increase of 6.3 percentage points [2] Shareholder Returns - The company intends to use its own funds and a special loan for the share repurchase, which is expected to cover about 1.39% of the total share capital [2]