LCXX(SZ:000977) Western Securities·2025-11-04 06:43Investment Rating - The investment rating for the company is "Buy" [5][11]. Core Views - The company has shown strong revenue growth, with a 45% year-over-year increase in revenue for the first three quarters of 2025, reaching 1206.69 billion yuan. The net profit attributable to shareholders increased by 15% year-over-year to 14.82 billion yuan [1][5]. - The company has a solid demand outlook, as indicated by the increase in contract liabilities, which rose by 36.93 billion yuan to 315.45 billion yuan by the end of Q3 2025. This reflects a high certainty of downstream demand [1][2]. - The company is actively investing in research and development, particularly in AI server technology, which positions it well for future growth as clients expand their capital expenditures in generative AI applications [2][5]. Summary by Sections Financial Performance - For Q3 2025, the company reported revenue of 404.77 billion yuan, a decrease of 1% year-over-year but an increase of 21% quarter-over-quarter. The net profit for the same quarter was 6.83 billion yuan, down 2% year-over-year but up 103% quarter-over-quarter [1][5]. - The gross margin for the first three quarters of 2025 was 4.91%, a decrease of 1.79 percentage points year-over-year, while the net margin was 1.23%, down 0.30 percentage points year-over-year [1][5]. Future Projections - The company is projected to achieve net profits of 26.38 billion yuan, 37.31 billion yuan, and 47.77 billion yuan for the years 2025, 2026, and 2027, respectively [2][5]. - Revenue forecasts for the upcoming years are as follows: 158.16 billion yuan in 2025, 221.15 billion yuan in 2026, and 286.19 billion yuan in 2027, with growth rates of 37.8%, 39.8%, and 29.4% respectively [3][10]. Market Position - The company maintains strong technical reserves in the server industry, particularly in AI servers, and has established long-term business relationships with downstream clients [2][5]. - The company’s stock is currently priced at 63.78 yuan, with a price-to-earnings ratio projected to decrease from 52.7 in 2023 to 19.7 by 2027 [3][10].