TJSMW(600577) 国盛证券·2024-12-02 01:16Investment Rating - The report initiates coverage on Jingda Co Ltd (600577 SH) with a "Buy" rating [4] Core Views - Jingda Co Ltd is a leading player in the electromagnetic wire industry with a 12% market share in 2022 and a production capacity of over 300 000 tons [2] - The company is well-positioned to benefit from the AI-driven copper connection market particularly through its subsidiary Hengfeng Special Conductor which specializes in silver-plated copper [4] - The AI server market is expected to see significant growth with copper connections becoming a key trend due to their cost and energy efficiency advantages [3] Company Overview - Jingda Co Ltd founded in 1990 has over 30 years of experience in the electromagnetic wire industry and has participated in drafting industry standards [2] - The company's main business is enameled wire which accounted for 71% of its revenue in 2023 [2] - Jingda has two key subsidiaries Hengfeng Special Conductor and Shanghai Superconductor which focus on special conductors and high-temperature superconductors respectively [21] AI Server and Copper Connection Market - NVIDIA's GB200 AI chip and NVL72/NVL36 cabinets introduced in March 2024 have redefined internal cabinet connections using copper cables which are cost-effective and energy-efficient [3] - The copper connection market is expected to accelerate in 2025 with major players like Google Amazon and Huawei rapidly deploying AI servers [3] - Silver-plated copper is a critical component in the AI copper connection supply chain with high technical and certification barriers [4] Financial Performance - In the first three quarters of 2024 Jingda reported revenue of 16 09 billion yuan and net profit of 420 million yuan representing year-on-year growth of 22 4% and 33 8% respectively [2] - The company's revenue is expected to grow from 21 003 billion yuan in 2024 to 25 842 billion yuan in 2026 with net profit projected to increase from 551 million yuan to 965 million yuan over the same period [4] Industry Trends - The global AI server market is projected to grow from 31 billion USD in 2023 to 430 billion USD by 2033 with a CAGR of 30 3% [39] - Copper connections are becoming increasingly important in AI servers due to their low cost low power consumption and low latency advantages [3] - The demand for high-speed data transmission is driving the adoption of 800G and 1 6T solutions in AI servers [39] Competitive Advantage - Hengfeng Special Conductor a subsidiary of Jingda is a leader in the silver-plated copper market with a strong customer base including major players like Amphenol Tyco Electronics and Luxshare Precision [4] - The company has broken through the bottleneck of ultra-fine high-speed transmission copper wire and has received the National Science and Technology Progress Award [116] Future Outlook - Jingda is expected to benefit from the growth in the AI server market particularly through its silver-plated copper products which are essential for high-speed data transmission [4] - The company's traditional enameled wire business is also expected to grow driven by the increasing demand for new energy vehicles [117]