Shenzhen Lihexing (SZ:301013) Tianfeng Securities·2024-06-04 13:02Investment Rating - The report gives a "Buy" rating for the company, with a target price of 14.38 CNY per share, corresponding to a market capitalization of 3.36 billion CNY [18][42][31]. Core Viewpoints - The company is positioned as a leading intelligent equipment supplier, benefiting from the recovery of Huawei's sales, which is expected to drive a rapid increase in orders [40][42]. - The AI server market is expanding significantly, with China leading globally, and the company is well-placed to capitalize on this growth due to its strong partnerships and product offerings [11][38]. - The full liquid cooling supercharging solution is highlighted as a next-generation charging technology with substantial market potential, supported by Huawei's deployment plans [41][40]. Summary by Sections Company Overview - The company specializes in automation and intelligent equipment, becoming a qualified supplier for Huawei in 2013 and has since developed a strong partnership [46][40]. - The company’s main products include intelligent manufacturing equipment, specialized accessories, and technical services, with intelligent manufacturing equipment constituting over 60% of its revenue [63][62]. Market Analysis - The AI server market reached 15.63 billion USD in 2021, growing at 39.1%, with expectations for continued growth driven by increasing demand for AI computing power [11][38]. - The domestic AI server market is projected to reach 12.34 billion USD by 2026, with a CAGR of 15.82% [11]. Financial Projections - Revenue is expected to grow significantly from 1.09 billion CNY in 2024 to 1.55 billion CNY in 2026, with net profit projections of 0.88 billion CNY, 1.20 billion CNY, and 1.60 billion CNY for the same years [16][42]. - The company’s gross margin is projected to improve slightly, reaching 34.10% by 2026 [16]. Competitive Position - The company holds a strong position in the AI server market, with domestic manufacturers capturing over 50% of the top five market shares [13]. - The report emphasizes the high market concentration, with the top five companies accounting for over 80% of the market, indicating a favorable competitive landscape for the company [13]. Future Outlook - The company is expected to benefit from the increasing demand for AI servers and the deployment of liquid cooling technology, positioning it well for future growth [40][41].