Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [6]. Core Views - The company is transitioning from a smart city service provider to a computing power service provider, capitalizing on the AI infrastructure boom. It has already secured significant contracts in the computing power sector and is expected to see substantial growth in this area [6][49]. - The AI industry is rapidly developing, with major investments from leading companies like Alibaba, which plans to invest over 380 billion yuan in cloud and AI hardware infrastructure over the next three years. This trend is expected to drive the demand for computing power services [6][31]. - The company has a strong capability in optimizing network configurations and has already announced multiple significant computing power orders, indicating a robust market position [6][46]. Summary by Sections 1. Company Overview - Founded in 1997, the company has evolved from providing comprehensive smart city solutions to integrating computing power services, achieving a revenue of 771 million yuan in 2023, with a net profit of 42.2 million yuan [6][9]. - The company has begun to establish a presence in the computing power sector, contributing 15% to its total revenue in 2023 [6][19]. 2. AI Infrastructure Development - The report highlights the emergence of a large-scale AI infrastructure in China, driven by advancements in AI models and increased capital expenditure from major tech firms [6][25]. - The government is also actively promoting the integration of state-owned enterprises into the national computing power layout, further supporting the industry's growth [6][32]. 3. Transition to Computing Power Services - The company has a long history in data center services and has leveraged this experience to enter the computing power market, securing contracts worth 1.465 billion yuan [6][46]. - It has established a subsidiary in Hong Kong to explore overseas market opportunities, indicating a strategic expansion plan [6][47]. 4. Financial Projections - The report projects the company's net profits to be -50 million yuan in 2024, 51 million yuan in 2025, and 292 million yuan in 2026, reflecting a significant turnaround as the computing power services gain traction [6][49]. - Revenue forecasts indicate a substantial increase in the computing power segment, with expected growth rates of 331% in 2025 and 200% in 2026 [6][50]. 5. Valuation and Comparables - The company is compared to peers in the industry, with a projected PE ratio of 25 for 2026, which is lower than the average of comparable companies, suggesting potential for upside [6][53].
宏景科技：算力服务新秀，乘AI基建之风-20250304