Core Insights - The report highlights a strong performance by Ruijie Networks (301165) in H1 2025, with significant revenue and profit growth driven by the internet data center switch segment [2][3] - The company is rated as a "buy" by Minsheng Securities, indicating positive market sentiment towards its future prospects [1] Financial Performance - In H1 2025, Ruijie Networks achieved revenue of 6.649 billion yuan, a year-on-year increase of 31.84% [2] - The net profit attributable to shareholders reached 452 million yuan, up 194.00% year-on-year, while the net profit excluding non-recurring items was 432 million yuan, reflecting a 245.14% increase [2] - Q2 2025 saw a net profit of 345 million yuan, marking a year-on-year growth of 127.66% and a quarter-on-quarter increase of 221.46% [2] Business Segments - The revenue breakdown for H1 2025 shows that network equipment generated 5.841 billion yuan, a 46.58% increase, accounting for 87.85% of total revenue [3] - Data center switch revenue was 3.539 billion yuan, up 110.03%, with sales volume increasing by 333.07% to 111,300 units [3] - International business revenue reached 1.145 billion yuan, a 48.46% increase, with a notable growth in the Asia-Pacific and European markets [3] Profitability and Cost Management - The gross margin for network equipment was 31.01%, down 6.85 percentage points year-on-year, primarily due to cost-cutting pressures from clients and price competition [4] - The company has optimized its cost structure, with sales, management, and R&D expense ratios improving [4] - The net profit margin for H1 2025 was 6.80%, an increase of 3.75 percentage points year-on-year [4] Future Outlook - The company is expected to benefit from increased capital expenditure in the domestic internet sector and a more favorable GPU supply situation, leading to continued growth in data center switch sales [4] - Profit forecasts for 2025, 2026, and 2027 are 1.272 billion yuan, 1.869 billion yuan, and 2.629 billion yuan, respectively, with corresponding PE ratios of 57, 39, and 28 [4]