LCXX(SZ:000977) Guohai Securities·2024-04-06 16:00Investment Rating - The report upgrades the investment rating of the company to "Buy" [1][8] Core Views - The company is entering a new growth cycle driven by globalization and diversified computing power layout [1] - The AI server market is expected to see strong demand for both training and inference, with the company maintaining a leading position in the Chinese market [5][6] - The overall server market is recovering, benefiting from the digitalization and intelligentization trends across various industries [6][7] Summary by Sections AI Servers - The company holds the largest market share in AI servers in China, with expectations for continued growth in computing power demand for large models in 2024 [5] - In H1 2023, the company's overseas revenue reached 4.516 billion yuan, a year-on-year increase of 47.44% [3] General Servers - The company ranked second globally in server shipments and sales in 2023, with a leading position in edge server market share in China [6] - The global server shipment is expected to grow by 1.7% quarter-on-quarter in Q1 2024, indicating a recovery in demand [7] Core Technologies - The company is focusing on liquid cooling and server operating systems to enhance its competitive edge [8] - The liquid cooling strategy has positioned the company as a leader in the Chinese liquid cooling server market, with nearly 50% market share in H1 2023 [8] Financial Forecasts - The company is projected to achieve a net profit of 2.530 billion yuan in 2024 and 3.564 billion yuan in 2025, with corresponding EPS of 1.72 yuan and 2.42 yuan [9][10] - The current stock price corresponds to a P/E ratio of 22.90 for 2024 and 16.26 for 2025 [9][10]