SMHC(SH:600131) Changjiang Securities·2024-12-11 00:51Investment Rating - The report maintains a "Buy" rating for the company [2][7][9]. Core Views - The recent announcements by the company on December 9, 2023, clarify the acquisition of Yili Technology and the measures to resolve industry competition issues, indicating smooth progress in addressing these challenges [5][6]. - The company is expected to significantly increase its business scale, with projected net profits for 2024, 2025, and 2026 estimated at 905 million, 1.039 billion, and 1.180 billion yuan respectively, corresponding to PE ratios of 28.5x, 24.8x, and 21.9x [2][7]. Summary by Sections Acquisition and Competition Resolution - The company plans to acquire 100% of Yili Technology and 59.3% of its subsidiary, with completion expected by August 31, 2025. This acquisition is aimed at resolving industry competition issues [5][6]. - The company will focus on cloud network infrastructure and related services, while other competitors will cease certain overlapping business activities, potentially increasing the company's market share [5][6]. Financial Projections - The company anticipates revenue growth from 7.673 billion yuan in 2023 to 10.848 billion yuan in 2026, with a steady gross profit margin around 21% [17]. - The net profit is projected to grow from 828 million yuan in 2023 to 1.180 billion yuan in 2026, reflecting a strong upward trend in profitability [17]. Market Position and Growth Potential - The company is positioned as a core player in the digitalization of the power grid, with significant growth opportunities driven by the national strategy for digital infrastructure [6][7]. - The expected reduction in related party transactions to below 50% by December 2029 will allow the company to explore new products and markets, supporting long-term growth [6][7].