Digital China(SZ:000034) Guohai Securities·2024-03-30 16:00Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's 2023 performance met expectations, with revenue of 1196.24 billion yuan, a year-on-year increase of 3.23%, and a net profit attributable to shareholders of 11.72 billion yuan, up 16.66% year-on-year [5][6] - The company is focusing on a three-pronged strategy of "Digital Cloud + Intelligent Computing + Generative AI" to enhance its core competitiveness [5][6] - The company has seen significant growth in its strategic business segments, particularly in cloud computing and digital transformation, which generated revenue of 69.31 billion yuan, a year-on-year increase of 37.98% [4][6] Summary by Sections Financial Performance - In 2023, the company achieved a net profit of 11.72 billion yuan, with a non-recurring net profit of 12.63 billion yuan, reflecting a 37.22% year-on-year growth [6][10] - The fourth quarter of 2023 saw revenue of 354.69 billion yuan, a 13.03% increase year-on-year, while net profit slightly decreased by 0.71% [6][10] Strategic Business Development - The company's self-branded business, Shenzhou Kuntai, reported revenue of 3.829 billion yuan, up 48.95% year-on-year, and its Xinchuang business exceeded 3.4 billion yuan, growing 71% year-on-year [3][4] - The company has launched new AI server products and achieved significant certifications, expanding its market presence [3][4] Market Position and Future Outlook - The company is well-positioned to benefit from the ongoing digital economy and AI developments, with a focus on enhancing its distribution strategy and optimizing its sales network [9][10] - The report projects future net profits of 14.37 billion yuan, 17.32 billion yuan, and 20.38 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 2.15, 2.59, and 3.04 yuan per share [10][11]