Shannon Semi(SZ:300475) EBSCN·2024-03-04 16:00Investment Rating - The report maintains a "Buy" rating for Shannon Core Creation (300475 SZ) [6] Core Views - Shannon Core Creation is a leading distributor of electronic components in China, with strong market development capabilities and a leading customer base including Alibaba, ByteDance, and others [9] - The company has obtained authorization from major global memory suppliers such as SK Hynix and MediaTek, forming a competitive advantage in the distribution of original factory products [31] - The company is actively expanding into the enterprise SSD business through joint ventures, aiming to break the monopoly of international manufacturers and promote domestic substitution [37] Business Overview - Shannon Core Creation primarily engages in the distribution of electronic components, with 95% of its revenue coming from this business in 2022 [32] - The company's main products include memory products from SK Hynix and main control chips from MediaTek, with DRAM accounting for about 70% of memory products [32] - The company has established a joint venture, Haipu Storage, to focus on the design, production, and sales of enterprise SSD products, leveraging its existing customer resources and technical advantages [37][39] Market and Industry Analysis - The enterprise SSD market in China is expected to grow significantly, driven by cloud computing and digital economy demands, with a projected market size of 66 9 billion yuan by 2026 and a compound annual growth rate of 23 7% [14] - The demand for enterprise SSDs is primarily driven by large data center users such as Alibaba, Tencent, and Baidu, with a focus on higher capacity, faster speed, and better security [14] Financial Performance and Projections - The company's revenue for 2023 is projected to be 11 525 billion yuan, with a net profit of 333 million yuan [57] - For 2024 and 2025, the company's revenue is expected to grow to 15 367 billion yuan and 17 486 billion yuan, respectively, with net profits of 384 million yuan and 429 million yuan [57] - The company's PE ratio is projected to be 47x, 41x, and 37x for 2023, 2024, and 2025, respectively [57] Strategic Developments - Shannon Core Creation has established Haipu Storage with a registered capital of 100 million yuan, with the company holding a 35% stake [34] - The company plans to use SK Hynix's NAND particles and domestic main control chips in its enterprise SSD products, which are currently in the testing and verification phase [17] - The company has implemented a restricted stock incentive plan, granting 1 83 million shares to incentivize key personnel, with clear revenue growth targets for the coming years [20][21] Shareholder and Equity Structure - The company's controlling shareholder transferred 5% of its shares to Wuxi State-owned Assets, with the total transaction amount reaching 567 38 million yuan [27] - After the share transfer, the controlling shareholder and its affiliates will hold 20 68% of the company's shares, with no change in control [74]