Huaqin Technology (603296) 中泰证券·2024-02-27 16:00Investment Rating - The report assigns a "Buy" investment rating to the company, indicating a positive outlook for its future performance [7]. Core Views - The company is positioned as a global leader in the ODM (Original Design Manufacturer) sector for smart hardware, with a diversified product structure termed "2+N+3" [4][12]. - The company has shown resilience in its revenue growth despite market fluctuations, with a projected revenue CAGR of 22.5% from 2018 to 2023 and a net profit CAGR of 71.2% [4][16]. - The report highlights the company's strategic expansion into server and automotive electronics, which are expected to drive long-term growth [6][7]. Summary by Sections Company Overview - The company, Huqin Technology, was established in 2005 and has evolved from a focus on feature phone IDH services to a comprehensive ODM model, now leading in the global smart hardware market [4][12]. Financial Performance - The company reported total revenue of 83,759 million yuan in 2021, with a projected revenue of 101,564 million yuan in 2024, reflecting a growth rate of 19.3% [4]. - Net profit is expected to grow from 2,682 million yuan in 2023 to 2,980 million yuan in 2024, indicating a growth rate of 11.1% [4]. Product Structure - The "2+N+3" product structure includes smartphones, laptops, consumer electronics, enterprise data center products, automotive electronics, and software, positioning the company as a leader in multiple categories [4][12]. Market Position - The company holds a significant market share in the global smartphone ODM sector, with a 31% market share in 2021, which slightly decreased to 28% in 2022 [5]. - The ODM model is gaining traction in the smartphone industry, with global penetration rates expected to rise from 39.6% in 2022 to 42% by 2025 [5]. Strategic Initiatives - The company is actively expanding its server and automotive electronics segments, with recent product launches in AI servers and smart cockpit solutions [6][7]. - The report emphasizes the potential for growth in the AI PC market, which is expected to accelerate hardware upgrades and replacements [5][6]. Investment Recommendations - The report forecasts revenues of 851.4 billion yuan in 2023, 1,015.6 billion yuan in 2024, and 1,239.8 billion yuan in 2025, with corresponding net profits of 26.8 billion yuan, 29.8 billion yuan, and 35.2 billion yuan [7]. - The company’s valuation is higher than the industry average, but its leadership position in the ODM sector and growth potential in emerging markets justify the "Buy" rating [7].