Guolian Securities·2024-04-30 09:02Investment Rating - The report upgrades the investment rating of the company to "Buy" with a target price of 36.32 CNY, based on a 16x PE for 2024 [6][4]. Core Insights - The company reported Q1 2024 revenue of 30.578 billion CNY, a year-on-year increase of 4.93%, and a net profit attributable to shareholders of 2.741 billion CNY, up 3.74% year-on-year [1]. - The gross margin for Q1 2024 was 42.02%, a decrease of 2.47 percentage points year-on-year, but an increase of 0.49 percentage points compared to the full year of 2023 [2]. - The company continues to invest in R&D, particularly in artificial intelligence, establishing multiple product lines and laboratories to support the development of intelligent computing solutions [2]. Financial Performance - The company’s revenue projections for 2024-2026 are 133.93 billion CNY, 146.00 billion CNY, and 159.21 billion CNY, with year-on-year growth rates of 7.79%, 9.02%, and 9.04% respectively [4]. - The net profit attributable to shareholders is expected to be 10.870 billion CNY, 12.699 billion CNY, and 14.842 billion CNY for the same period, with growth rates of 16.56%, 16.83%, and 16.87% respectively [4]. - The company’s EPS is projected to be 2.27 CNY, 2.65 CNY, and 3.10 CNY for 2024, 2025, and 2026, respectively, indicating a 3-year CAGR of 16.75% [4]. Business Segments - The first curve, "Connectivity," shows steady growth, while the second curve, "Computing Power," is accelerating its expansion [3]. - The company ranks second globally in the shipment of 5G base stations and core networks for four consecutive years [3]. - The consumer business continues to lead globally in market share for mobile internet products, specifically 5G FWA and MBB [3].