Precise(SZ:300442) Southwest Securities·2024-04-29 02:30Investment Rating - The report assigns a "Buy" rating for Runze Technology (300442) with a target price of 38.7 CNY over the next six months [1]. Core Insights - Runze Technology reported a robust revenue growth of 60.3% year-on-year in 2023, reaching 4.35 billion CNY, with a net profit of 1.76 billion CNY, up 47% [2][19]. - The company is expanding its AIDC business, which is becoming a new growth driver alongside its established IDC operations [2][11]. - The data center industry is projected to continue growing, driven by digital transformation and AI technology, with a market size nearing 200 billion CNY in 2022 and a compound annual growth rate (CAGR) of 30.69% over the past three years [2][19]. Summary by Sections 1. Business Overview - Runze Technology focuses on IDC and AIDC businesses, establishing a comprehensive layout across six major regions in China, with plans for approximately 61 intelligent computing centers and 320,000 cabinets [2][11][19]. - The company has successfully completed asset restructuring and is enhancing its data center construction investments [11]. 2. Financial Analysis - The company achieved a net profit margin of 40.4% in 2023, despite a slight decline of 8.4% year-on-year [2][21]. - The revenue from IDC business is expected to grow steadily, while AIDC is anticipated to see a significant increase due to rising demand for AI computing power [28][30]. - R&D expenses have increased to 101.24 million CNY in 2023, reflecting a commitment to technological advancement [25][27]. 3. Earnings Forecast and Valuation - The forecasted earnings per share (EPS) for 2024-2026 are 1.29 CNY, 1.67 CNY, and 2.25 CNY, respectively, with a projected compound growth rate of 29.93% for net profit [3][30]. - The report suggests a valuation of 30 times earnings for 2024, leading to a target price of 38.7 CNY [3][30].