LCXX(SZ:000977) Huaxin Securities·2024-05-05 11:00Investment Rating - The report maintains a "Buy" investment rating for the company [2][4] Core Views - The company reported strong Q1 2024 performance with revenue of 17.607 billion yuan, a year-on-year increase of 85.32%, and a net profit attributable to shareholders of 306 million yuan, up 64.39% year-on-year [2][3] - The growth in performance is attributed to increased customer demand and server sales, with a significant rise in contract liabilities indicating future revenue potential [2][3] - The company is positioned as a leader in the server industry, benefiting from the growing demand for AI servers and the expansion of the AI computing market in China [2][3] Summary by Sections Financial Performance - In Q1 2024, the company achieved a gross margin of 8.08% (down 4.93 percentage points year-on-year) and a net profit margin of 1.68% (down 0.39 percentage points year-on-year) [2] - The company’s contract liabilities reached 4.14 billion yuan, a year-on-year increase of 116.47%, primarily due to growth in advance payments [2] Market Position - The company is recognized as a leading player in the server market, with a comprehensive range of products across various segments [2][3] - The AI server market in China is projected to grow significantly, with the company expected to benefit from this trend [2][3] Future Projections - Revenue forecasts for 2024, 2025, and 2026 are 76.646 billion yuan, 90.282 billion yuan, and 108.056 billion yuan respectively, with corresponding EPS of 1.47 yuan, 1.87 yuan, and 2.20 yuan [4][6] - The current stock price corresponds to a PE ratio of 28, 22, and 19 for the years 2024, 2025, and 2026 respectively [4]