Suzhou Centec (SH:688702) Guotou Securities·2024-02-29 16:00Investment Rating - The report assigns a "Buy - A" investment rating to the company, with a 6-month target price of 43.20 CNY [14][15]. Core Insights - The company achieved a revenue of 1.037 billion CNY in 2023, representing a year-on-year growth of 35.17%. The net profit attributable to the parent company was -20.32 million CNY, a reduction in loss by 30.93% compared to the previous year [2]. - The company is a leading Ethernet switch chip design enterprise in China, with products covering switch capacities from 100 Gbps to 2.4 Tbps. The rapid development of the AI industry has increased demand for high-speed switches, particularly in data centers [3]. - The company has a strong focus on technological innovation and R&D, with significant investments to enhance product performance and functionality. As of December 31, 2022, the company held 395 authorized invention patents and 5 PCT patents [3]. Financial Performance - The projected revenues for the company from 2023 to 2025 are 1.037 billion CNY, 1.476 billion CNY, and 1.826 billion CNY, respectively. The net profit is expected to improve from -20.3 million CNY in 2023 to 10.3 million CNY in 2024 and 57.9 million CNY in 2025 [15][16]. - The company’s gross profit margin is projected to improve from 36.2% in 2023 to 39.0% in 2025, indicating a positive trend in profitability [16]. Market Position - The company has established itself as a key player in the Ethernet switch chip market, with its products being adopted by major domestic network equipment manufacturers. The Arctic series, aimed at ultra-large-scale data centers, is progressing well [3][15]. - The company’s market capitalization is approximately 15.33 billion CNY, with a circulating market value of about 1.39 billion CNY [14].