Huaqin Technology (603296) 东吴证券·2025-05-17 10:25Investment Rating - The report assigns a "Buy" rating for the company, Huqin Technology (603296), marking its first coverage [1]. Core Views - Huqin Technology is positioned as a leading smart hardware platform, benefiting from dual growth in AI-driven data centers and consumer electronics [1]. - The company has shown significant revenue growth, with a five-year CAGR of 25.49% from 2019 to 2024, and a net profit CAGR of 42.1% during the same period [1][31]. - High-performance computing is identified as the main growth driver, with emerging businesses like automotive electronics and AIoT also contributing to rapid growth [1][31]. - The company is expected to maintain a strong market position in the ODM sector, particularly in smartphones and PCs, while also expanding its data center business [1][31]. Summary by Sections 1. Company Overview - Huqin Technology, established in 2005, has evolved from an IDH model to a global smart hardware platform, offering a diverse range of products including smartphones, tablets, laptops, AIoT, and automotive electronics [11][18]. - The company has achieved a significant market presence, ranking 20th in the electronic information sector and 231st in the China 500 [11]. 2. Financial Performance - The projected total revenue for 2023 is 85.34 billion yuan, with a forecasted increase to 109.88 billion yuan in 2024, representing a year-on-year growth of 28.76% [1]. - The net profit for 2023 is estimated at 2.71 billion yuan, with an expected rise to 2.93 billion yuan in 2024, reflecting an 8.10% increase [1]. - The company's earnings per share (EPS) is projected to grow from 2.66 yuan in 2023 to 2.88 yuan in 2024 [1]. 3. Market Position and Growth Drivers - The high-performance computing segment is projected to account for 57.5% of revenue in 2024, with a growth rate of 29% [31]. - The smartphone ODM market share for Huqin is expected to remain strong, with a 27.9% global share in 2023, maintaining its position as a market leader [47]. - The data center business is anticipated to grow significantly, driven by increasing demand for AI servers, with projections indicating a market growth from 25.27 billion by 2028 [64][67]. 4. Strategic Initiatives - The company has implemented a global manufacturing strategy, establishing production bases in North America, Southeast Asia, and South Asia to mitigate geopolitical risks [38][39]. - Huqin's acquisition of Yiluda is expected to enhance its entry into the North American wearable device supply chain [1][38]. - The company emphasizes R&D, with a projected R&D expenditure of 5.2 billion yuan in 2024, reflecting a 13.38% increase year-on-year [33].