SHENGYI ELECTRONICS CO.(SH:688183) CMS·2025-03-28 13:04Investment Rating - The investment rating for the company is "Accumulate" [1] Core Views - The company is expected to benefit from the rapid growth of AI-related orders, with a significant increase in revenue and profitability anticipated in 2024 and beyond [5] - The company has optimized its product structure, leading to a substantial increase in revenue and a turnaround from losses to profits [5] - The company is positioned well in three major application areas: communications, servers, and automotive electronics, with positive developments in each sector [5] Financial Performance - In 2024, the company reported total revenue of 4.69 billion, a year-on-year increase of 43.2%, and a net profit of 332 million, compared to a loss of 25 million in the previous year [1][5] - The gross margin improved to 22.7%, up by 8.2 percentage points year-on-year, while the net margin reached 7.1%, an increase of 7.9 percentage points [1] - The company plans to distribute a cash dividend of 2.50 per 10 shares (before tax) [1] Revenue Growth Projections - Revenue is projected to grow to 7.77 billion in 2025, representing a 66% increase, and further to 10.51 billion in 2026 and 13.29 billion in 2027 [6] - The company expects to achieve a net profit of 1 billion in 2025, with a growth rate of 201% [6] Product Development and Market Position - The company has made significant advancements in the communications sector, achieving breakthroughs in 800G switches and satellite communications [5] - In the server sector, AI server products have seen a substantial increase in revenue, now accounting for 49% of total revenue [5] - The automotive electronics segment is also experiencing steady growth, with ongoing orders in smart driving and energy management [5] Order and Capacity Utilization - The company reports strong order intake and high capacity utilization rates at the beginning of 2025, indicating robust demand for AI servers and related products [5] - The company is well-positioned to capitalize on the growing demand in the AI and communications markets, with ongoing expansion of high-end production capacity [5] Long-term Growth Potential - The company is expected to benefit from its established presence in the communications, high-performance computing (HPC), and automotive electronics sectors, with a strong competitive edge due to its core technologies [5] - The anticipated release of new production capacity is expected to drive sustained growth in the coming years [5]