Shannon Semi(SZ:300475) ZHONGTAI SECURITIES·2024-03-06 16:00Investment Rating - The report assigns a "Buy" rating for the company with a target price of 36.56 CNY per share [5]. Core Insights - The company has transformed from a washing machine component manufacturer to an electronic component distributor, now entering the enterprise-level SSD market, which opens up significant growth opportunities [14][25]. - The company is the largest domestic agent for Hynix cloud service storage, strategically positioned in a market valued at 200 billion USD, with substantial growth potential in mainland China [4][14]. - The company has established a joint venture, Haipu Storage, to develop its own brand of enterprise-level SSD products, holding a 35% stake [14][19]. Summary by Sections 1. Transformation to Electronic Component Distribution - The company transitioned from manufacturing washing machine clutches to electronic component distribution after acquiring a subsidiary in 2021, with over 98% of revenue now coming from this sector [14][25]. - The revenue for 2022 reached 13.772 billion CNY, with a year-on-year growth of 49.6%, primarily driven by the subsidiary's performance [25][28]. 2. Hynix Cloud Service Storage Agent - The company is the largest domestic agent for Hynix, with a significant portion of its revenue derived from this partnership, covering major domestic internet and server manufacturers [4][14]. - The report highlights the company's strategic positioning in a rapidly growing market, with a focus on enterprise-level SSDs [4][14]. 3. Enterprise-Level SSD Market - The enterprise SSD market is projected to be worth 30 billion USD, with substantial opportunities for domestic replacements [14][19]. - The company has initiated a joint venture with industry leaders to penetrate this market, indicating a strong commitment to growth in this segment [14][19]. 4. Financial Forecast - The report provides financial projections, estimating revenues of 4.5 billion CNY and 5.1 billion CNY for the upcoming years, reflecting a robust growth trajectory [4][14].