FII(601138) 中邮证券·2024-06-07 07:00Investment Rating - The report initiates coverage with a "Buy" rating for the company, projecting significant growth in revenue and profit over the next few years [4]. Core Insights - The company is positioned to benefit significantly from the AI wave, with a notable increase in AI server revenue, which has nearly doubled year-on-year in Q1 2024 [2]. - The global AI server market is experiencing rapid growth, driven by increasing demand for computing power and substantial capital expenditures from major cloud service providers [2]. - The company has a strong market presence in the AI server segment, with AI servers accounting for nearly 40% of its overall server revenue [2]. - The company plans to launch a new generation of generative AI servers in 2024, further enhancing its product offerings [2]. - The demand for high-bandwidth communication equipment is also rising, leading to rapid growth in the company's high-speed switches and routers business [3]. Financial Performance - In Q1 2024, the company reported revenue of 1186.88 billion yuan, a year-on-year increase of 12.09%, and a net profit of 41.85 billion yuan, up 33.77% year-on-year [1]. - For the full year 2023, the company achieved revenue of 4763.40 billion yuan, a decrease of 6.94% year-on-year, but net profit increased by 4.82% to 210.40 billion yuan [1]. - The company forecasts revenue growth to 5569.37 billion yuan in 2024, with net profit expected to reach 255.98 billion yuan, reflecting a growth rate of 21.66% [5]. Business Segments - The company operates in several key segments, including cloud computing, communication and mobile network equipment, and industrial internet, with respective revenues of 1943.08 billion, 2789.76 billion, and 16.46 billion yuan in 2023 [1]. - The gross margin for the cloud computing segment is 5.08%, while the communication equipment segment has a gross margin of 9.80% [1]. - The company has established itself as a leader in the intelligent terminal market, with a strong position in high-precision components for smartphones and wearable devices [3]. Future Outlook - The company is expected to continue focusing on AI and cloud computing infrastructure, enhancing its global production capacity and increasing R&D investments [2]. - The report anticipates a recovery in the global smartphone market in 2024, driven by the 5G replacement cycle and demand from emerging markets [3].