Investment Rating - The investment rating for the company is maintained at "Buy" with a target price of 80.51 RMB [9]. Core Insights - The company reported a revenue of 11.699 billion RMB for 2024, a year-on-year increase of 1%, and a net profit attributable to shareholders of 574 million RMB, up 43% year-on-year [2]. - In Q4 2024, the company achieved a revenue of 3.322 billion RMB, down 7.5% year-on-year, but the net profit increased by 32.5% to 162 million RMB, exceeding previous expectations due to significant improvement in profitability [2][3]. - The company is expected to benefit from the growth in AI Ethernet opportunities and the increase in capital expenditures from internet clients [2][5]. Revenue Breakdown - For 2024, the revenue from the network equipment segment was 9.653 billion RMB, a 15% increase year-on-year, with data center switch product revenue reaching 3.964 billion RMB, a remarkable 120% increase [3]. - The network security product revenue was 452 million RMB, down 47% year-on-year, while cloud desktop solutions revenue was 549 million RMB, down 28% [3]. - Domestic revenue decreased by 5% year-on-year, while overseas revenue increased by 53% due to successful implementation of the "deep cultivation in major countries and channel penetration" strategy [3]. Profitability and Cost Management - The overall gross margin for 2024 was 38.62%, a slight decrease of 0.33 percentage points year-on-year, but Q4 2024 gross margin improved to 46.47%, up 7.01 percentage points year-on-year [4]. - The company has shown significant improvement in overall expense ratios, with sales, management, and R&D expense ratios at 15.5%, 5.5%, and 16.1%, respectively [4]. Innovation and Market Trends - The company is focused on innovation in the data center switch sector, with new products such as the TH5 cold plate switch and 51.2T CPO switch, positioning itself to gain advantages in upcoming JDM tenders [5]. - The penetration of Ethernet in AI clusters is expected to continue increasing, driven by major players like NVIDIA and enhanced Ethernet performance [5]. Earnings Forecast and Valuation - The net profit forecasts for 2025-2027 have been adjusted to 775 million RMB, 961 million RMB, and 1.137 billion RMB, reflecting increases of 15% and 18% from previous estimates [6]. - The company is assigned a PE valuation of 59x for 2025, with a target price of 80.51 RMB, indicating strong growth potential in the high-speed switch business [6].
锐捷网络（301165）：4Q盈利能力显著优化，紧抓国内AI以太网机遇