Investment Rating - The investment rating for the company is "Outperform the Market" [5][27][29] Core Views - The company has achieved a revenue of 77.322 billion yuan in the first three quarters of 2025, representing a year-on-year increase of 31.41%. However, the net profit attributable to the parent company decreased by 11.24% to 1.404 billion yuan [1][9] - The subsidiary, H3C, benefited from the growth in AI demand, with its revenue increasing by 48.07% to 59.623 billion yuan in the same period. Domestic enterprise revenue grew by 62.55%, while international business revenue surged by 83.99% [1][9] - The company is focusing on the "Computing Power x Connectivity" strategy, launching new AI-driven products and solutions to meet industry demands [3][27] Financial Performance - The gross margin for the first three quarters of 2025 was 13.72%, down 3.87 percentage points year-on-year. The third quarter gross margin was 11.32%, reflecting a decline due to the release of low-margin customized internet servers [2][14] - The net profit margin for the first three quarters was 2.23%, a decrease of 1.21 percentage points year-on-year, while the third quarter net profit margin was 1.46%, showing a slight increase of 0.03 percentage points year-on-year [2][14] - The company has optimized its organizational structure and improved operational efficiency, resulting in a decrease in sales, management, and R&D expense ratios [2][14] Revenue Forecast - Revenue projections for the company from 2025 to 2027 are as follows: 18.2 billion yuan in 2025, 23.6 billion yuan in 2026, and 29.3 billion yuan in 2027, with corresponding P/E ratios of 41, 31, and 25 [27][29] - The expected revenue for 2025 is 97.148 billion yuan, with a growth rate of 22.9% [4][22] Subsidiary Performance - H3C's revenue is projected to reach 71.439 billion yuan in 2025, with a net profit margin of 5% [26]

Investment Rating - The investment rating for the company is "Outperform the Market" [6][26]. Core Views - The company continues to deepen its focus on "computing power and connectivity," with a total revenue of 79.024 billion yuan in 2024, a year-on-year increase of 2.22%, while the net profit attributable to shareholders decreased by 25.23% to 1.572 billion yuan [10][4]. - In Q1 2025, the company achieved a revenue of 20.79 billion yuan, reflecting a year-on-year growth of 22.25%, although the net profit attributable to shareholders fell by 15.75% to 349 million yuan [10][4]. - The company's ICT infrastructure and services business generated revenue of 54.459 billion yuan in 2024, up 5.73%, accounting for 68.91% of total revenue, with the subsidiary, H3C, contributing significantly [2][12]. - The company is actively expanding its international market presence, with international business revenue growing by 32.44% to 2.916 billion yuan in 2024 [2][12]. Summary by Sections Financial Performance - The company reported a total revenue of 79.024 billion yuan in 2024, with a net profit of 1.572 billion yuan, down 25.23% year-on-year [10][4]. - The projected net profits for 2025-2027 are 2.01 billion yuan, 2.47 billion yuan, and 2.98 billion yuan, respectively [4][26]. Market Position - The company maintains a leading market share in several product categories, including 38.2% in the Chinese enterprise campus switch market and 54.4% in the blade server market [2][12]. - The company is enhancing its product offerings by increasing the proportion of white-label products in collaboration with cloud vendors, which has slightly reduced the overall gross margin by 3.3 percentage points [3][20]. Strategic Initiatives - The company is focusing on AI applications, integrating large models with various industry scenarios, and has launched several new products, including the 800G CPO switch and the H3C S12500 core switch [3][20]. - The company plans to acquire an additional 30% stake in H3C, increasing its ownership to 81% [4][26].