Star-net(SZ:002396) EBSCN·2024-04-01 16:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return exceeding 15% over the next 6-12 months [4][14]. Core Insights - The company, Ruijie Networks, achieved a revenue of 11.542 billion yuan in 2023, reflecting a year-on-year growth of 1.9%, while net profit decreased by 27% to 401 million yuan due to weak demand from internet and government enterprise clients and high R&D expenditures [2][12]. - Ruijie Networks holds the third position in market share across various segments, including switches and data center switches, while leading in Wi-Fi6 product shipments and local computing cloud terminal market share [2]. - The launch of the AI-FlexiForce intelligent computing center network solution is expected to drive growth in the company's smart network business as domestic intelligent computing center construction accelerates [2][14]. Financial Performance Summary - In 2023, the company reported total revenue of 15.908 billion yuan, a slight increase of 1.06% year-on-year, with a net profit attributable to shareholders of 425 million yuan, down 26.36% [12][14]. - The overall gross margin for the company was 36.26%, a decrease of 0.32 percentage points compared to the previous year, with various product segments showing mixed performance in revenue growth and gross margins [13]. - The company has increased its management and R&D expenditures, with sales, management, R&D, and financial expense ratios rising to 13.91%, 4.88%, 16.74%, and 0.00% respectively [13]. Earnings Forecast and Valuation - The net profit forecasts for 2024 and 2025 have been adjusted downwards to 614 million yuan and 836 million yuan, respectively, reflecting a decrease of 23% and 2% from previous estimates [14]. - The report anticipates a positive outlook for the company driven by trends in AI intelligent computing centers and increased demand for data center white box switches [14]. - The projected P/E ratios for the company are 16X for 2024, 12X for 2025, and 9X for 2026, indicating a favorable valuation trajectory [14].