SW-TECH(SZ:300113) KAIYUAN SECURITIES·2025-04-18 10:15Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The recovery in PC gaming and esports is driving performance improvement, with growth supported by cloud computing and AI initiatives [3][4] - The company achieved a revenue of 1.84 billion yuan in 2024, representing a year-on-year increase of 28.37%, and a net profit of 252 million yuan, up 48.6% year-on-year [3] - The main revenue driver was the network advertising and value-added services segment, which generated 1.34 billion yuan, a 46.56% increase year-on-year, attributed to the recovery in the gaming industry and increased marketing activities [3] - The company is optimistic about the continued recovery in demand for PC games and esports, leading to revised profit forecasts for 2025-2027 [3] Financial Performance - In Q4 2024, the company reported a revenue of 443 million yuan, a 36.61% increase year-on-year, but a 24.74% decrease quarter-on-quarter [3] - The gross margin for 2024 was 41.13%, down 8.07 percentage points year-on-year, primarily due to costs in the network advertising and value-added services segment growing faster than revenue [4] - The company effectively controlled expenses, resulting in a net profit margin increase to 13.69%, up 1.86 percentage points year-on-year [4] Growth Drivers - The company is expanding its edge computing capabilities, having established over 300 edge data centers by the end of 2024, serving over 700,000 cloud terminals [4] - The edge computing services leverage idle computing power from internet cafes for AI inference and cloud gaming, presenting significant cost advantages [4] - The collaboration between AI and cloud computing is expected to form a second growth curve for the company [4] Earnings Forecast - The company forecasts net profits of 330 million yuan, 407 million yuan, and 490 million yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.48, 0.60, and 0.72 yuan [3][5] - The current stock price corresponds to a P/E ratio of 36.2, 29.3, and 24.3 for the years 2025, 2026, and 2027 respectively [5]