Huaqin Technology (SH:603296) Great Wall Securities·2024-05-31 10:31Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index within the next six months [11]. Core Views - The company is expected to benefit from the AI wave, which is anticipated to enhance its growth potential. The overall industry is projected to enter a mild recovery phase, with increasing demand in sectors such as smart terminals, high-performance computing, automotive electronics, and AIoT [2][6]. - The company's revenue for 2023 was approximately 85.34 billion yuan, a year-on-year decrease of 7.89%, while the net profit attributable to shareholders was about 2.71 billion yuan, reflecting a year-on-year increase of 5.59% [1][2]. - The company has a strong position in the ODM market, with a 27.9% share in the global smartphone ODM market, and is expected to maintain steady growth in its smart terminal business due to the recovery in consumer electronics demand [3][6]. Financial Performance Summary - Revenue and Profitability: - 2022 revenue was 92.65 billion yuan, with a growth rate of 10.6%. In 2023, revenue decreased to 85.34 billion yuan, with a projected recovery to 99.00 billion yuan in 2024, representing a growth rate of 16.0% [1][7]. - The net profit for 2022 was 2.56 billion yuan, increasing to 2.71 billion yuan in 2023, with expectations of 3.03 billion yuan in 2024, reflecting a growth rate of 11.9% [1][7]. - Margins: - The gross margin for 2023 was 11.33%, up 1.48 percentage points year-on-year, while the net margin was 3.11%, an increase of 0.42 percentage points [2][6]. - Earnings Per Share (EPS): - The latest diluted EPS for 2023 was 3.73 yuan, with projections of 4.17 yuan for 2024 and 5.63 yuan for 2026 [1][7]. Business Segment Performance - High-Performance Computing: - Revenue from high-performance computing products was 49.09 billion yuan in 2023, with a year-on-year growth of 1.96% [2]. - Smart Terminals: - Revenue from smart terminal products was 31.27 billion yuan, down 22.95% year-on-year, indicating challenges in this segment [2]. - AIoT and Other Products: - This segment saw significant growth, with revenue reaching 1.62 billion yuan, a year-on-year increase of 466.53% [2]. - Automotive and Industrial Products: - Revenue increased by 37.57% year-on-year to 0.81 billion yuan, showcasing strong demand in this area [2].