Digital China(000034) 中泰证券·2024-05-22 11:00Investment Rating - The report assigns a "Buy" rating for the company, with a market price of 30.32 CNY [1]. Core Insights - The company is positioned to benefit from the domestic AI and computing power development, leveraging its partnerships with Huawei and its own brand, Shenzhou Kuntai, to enhance its competitive edge in the market [1][6]. - The company has a strong market presence in IT distribution, with over 90% of its revenue coming from this segment, while also expanding its strategic business areas such as cloud computing and self-branded products [1][8]. - The launch of the "Shenzhou Wenxue" platform marks a significant step in the company's AI application development strategy, integrating various functionalities to support enterprise-level AI deployment [1][3]. Summary by Sections 1. Company Overview - Shenzhou Digital has transitioned from IT equipment distribution to becoming a "cloud + Xinchuang" brand supplier, with significant partnerships established with Huawei since 2018 [6]. - The company has optimized its business structure, with IT distribution and value-added services still accounting for over 90% of revenue, while cloud computing and self-branded products are gradually expanding [8][11]. 2. IT Distribution - The company maintains its leading position in the IT distribution industry, benefiting from a robust sales network and strong brand partnerships [17][25]. - The demand for IT products is expected to rise due to digital transformation initiatives and the upcoming PC replacement cycle, with projections indicating growth in the PC market [17][24]. 3. Self-Branded Products - The self-branded business, particularly under the Shenzhou Kuntai brand, has shown significant growth, with a revenue increase of 48.95% in 2023, driven by the demand for AI computing power [15][16]. - The company is strategically positioned within the Huawei ecosystem, enhancing its product competitiveness and market share in the domestic computing power landscape [1][15]. 4. AI Application Development - The introduction of the "Shenzhou Wenxue" platform aims to provide a comprehensive AI-native empowerment solution, enhancing the company's capabilities in AI application deployment [3][4]. - The platform integrates knowledge governance and model management, which are critical for enterprises looking to implement AI solutions effectively [3][4].