Digital China(SZ:000034) KAIYUAN SECURITIES·2024-03-30 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company is experiencing rapid growth in its Xinchuang (信创) business, which is expected to drive its new layout of "domestic computing power + intelligent computing" [3][4] - The company's 2023 annual report shows a revenue of 1196.24 billion yuan, a year-on-year increase of 3.23%, with significant growth in cloud computing and digital transformation [4] - The net profit attributable to shareholders for 2023 was 11.72 billion yuan, reflecting a year-on-year growth of 16.66% [4] Financial Performance Summary - The company has adjusted its net profit forecasts for 2024-2025 to 14.03 billion yuan and 16.99 billion yuan, respectively, with a new forecast for 2026 at 21.35 billion yuan [3] - Earnings per share (EPS) are projected to be 2.09, 2.54, and 3.19 yuan for 2024, 2025, and 2026, respectively [3] - The current stock price corresponds to price-to-earnings (PE) ratios of 14.1, 11.6, and 9.3 for the respective years [3] Business Development - The company is focusing on the "Kunpeng + Ascend" ecosystem, having developed and delivered several new AI server products, including the Shenzhou Kuntai brand server series [5] - The company has successfully entered the telecom procurement project and achieved full coverage of operator industry clients, receiving high recognition in sectors such as finance, digital government, education, and energy [5] - The launch of the generative AI product "Shenzhou Wenxue" marks a strategic upgrade, with successful applications in various industries [6]