Hygon Information Technology (SH:688041) Guotou Securities·2025-08-10 06:04Investment Rating - The investment rating for the company is "Buy-A" with a target price of 165.56 CNY, reflecting an expected return exceeding the market index [5]. Core Views - The company has demonstrated significant revenue growth driven by the increasing demand for domestic high-end chips, with a revenue increase of 45.21% year-on-year in H1 2025 [2]. - A strategic merger with Zhongke Shuguang is expected to enhance the company's position in the high-end computing sector, creating a closed-loop layout from chip design to complete systems [3]. - The company is heavily investing in R&D, with a 24.68% increase in R&D expenditure in H1 2025, indicating a commitment to technological advancement [4]. Summary by Sections Financial Performance - In H1 2025, the company achieved a revenue of 5.464 billion CNY, up 45.21% year-on-year, and a net profit of 1.201 billion CNY, up 40.78% year-on-year [1]. - In Q2 2025, the company reported a revenue of 3.064 billion CNY, a 41.15% increase year-on-year, and a net profit of 696 million CNY, a 23.14% increase year-on-year [1]. Revenue and Profitability - The overall gross margin for H1 2025 was 60.15%, a decrease of 3.28 percentage points year-on-year, attributed to product structure optimization and rising raw material costs [2]. - The net profit margin for H1 2025 was 30.05%, down 2.53 percentage points year-on-year [2]. Strategic Initiatives - The merger with Zhongke Shuguang aims to create synergies and strengthen the company's position in the AI chip industry, enhancing its competitiveness in the domestic computing market [3]. - The company is focusing on high-end computing, storage, and data center products, which are expected to drive future growth [3]. Research and Development - The company invested 1.711 billion CNY in R&D in H1 2025, representing 31.31% of its revenue, with a 28% increase in R&D personnel compared to the same period last year [4]. - Collaboration with the Chinese Academy of Sciences to promote AI applications in scientific research highlights the company's commitment to innovation [4]. Market Outlook - The company is projected to benefit from the AI industrialization wave and domestic substitution trends, with revenue forecasts of 13.743 billion CNY, 19.241 billion CNY, and 25.013 billion CNY for 2025, 2026, and 2027 respectively [9]. - The expected net profits for the same years are 3.210 billion CNY, 4.634 billion CNY, and 6.213 billion CNY [9].