FII(SH:601138) HTSC·2025-10-30 06:39Investment Rating - The report maintains a "Buy" rating for the company with a target price raised to 100.0 RMB from the previous 76.0 RMB [4][5]. Core Insights - The company reported a revenue of 243.17 billion RMB for Q3 2025, representing a year-over-year increase of 42.8%, which aligns with expectations [1]. - The net profit attributable to the parent company for Q3 reached 10.37 billion RMB, up 62.0% year-over-year, exceeding consensus estimates by 19.6% [1]. - The gross margin improved to 7.0%, a 0.5 percentage point increase from the previous quarter, surpassing Bloomberg's consensus by 1.0 percentage point [1]. - The AI server segment showed significant profitability improvements, contributing to the overall positive performance [1]. Summary by Sections Cloud Computing Business - The cloud computing segment saw revenue growth exceeding 65% year-over-year in the first three quarters of CY25, with Q3 alone showing over 75% growth [2]. - Revenue from cloud service providers accounted for 70% of the cloud computing business in Q3, with a year-over-year increase of over 150% [2]. - The company is expected to benefit from the ongoing demand for AI servers, with projected growth rates of 83.6%, 103.3%, and 24.5% for 2025, 2026, and 2027 respectively [2]. Communication and Mobile Network Equipment Business - The communication and mobile network equipment segment performed steadily, driven by the demand for AI-enabled terminal products [3]. - The switch business experienced a remarkable growth of 100% year-over-year in Q3, with 800G switches increasing by over 27 times [3]. - The gross margin for this segment is expected to improve by 0.6 percentage points in FY26 and 1.6 percentage points in FY27, reaching 10.2% and 11.8% respectively [3]. Financial Projections - The company’s revenue forecast for 2025-2027 remains unchanged, but gross margins have been adjusted upward by 0.55 to 1.85 percentage points [4]. - The net profit forecast for 2025-2027 has been increased by 11.6% to 13.0%, with projected figures of 35.32 billion RMB, 55.01 billion RMB, and 62.78 billion RMB respectively [4]. - The expected EPS for 2025, 2026, and 2027 is projected to be 1.78 RMB, 2.77 RMB, and 3.16 RMB respectively [4].