FII(SH:601138) Shenwan Hongyuan Securities·2025-08-20 07:23Investment Rating - The report initiates coverage with a "Buy" rating for the company [6][7]. Core Insights - The company has experienced rapid growth in the past two years, with a significant increase in revenue and net profit driven by the demand for AI servers and cloud computing [6][28]. - The cloud computing segment has become the company's largest business, accounting for over 50% of revenue in 2024, with a projected growth rate of 62% from 2025 to 2027 [31][79]. - The company is well-positioned to benefit from the increasing capital expenditures of major global cloud providers, indicating strong demand for AI-related services [50][57]. Summary by Sections 1. Company Overview - The company, backed by Hon Hai, has rapidly grown since its establishment in 2015, with a focus on cloud services and industrial internet [17]. - The management team is experienced, with a new rotating CEO system implemented to enhance decision-making processes [25]. 2. Cloud Computing Business - The cloud computing sector is expected to see substantial growth, with revenue projections of 5,175 billion, 9,110 billion, and 12,094 billion from 2025 to 2027, respectively [8][79]. - The demand for AI servers is robust, with significant capital expenditure increases from major cloud players, reflecting a strong market outlook [50][57]. 3. Other Business Segments - The high-speed switch market is experiencing rapid growth, with the company's 800G switches seeing a revenue increase of nearly three times in the first half of 2025 compared to the previous year [68]. - The precision structure components for consumer electronics are benefiting from innovations in AI smartphones, with a 17% revenue increase in the first half of 2025 [69]. 4. Financial Forecast and Valuation - Revenue forecasts for 2025 to 2027 are 8,434 billion, 13,203 billion, and 17,156 billion, with corresponding growth rates of 38.5%, 56.5%, and 29.9% [79]. - The projected net profit for the same period is 305 billion, 505 billion, and 594 billion, with growth rates of 31.5%, 65.5%, and 17.6% [79].