Investment Rating - The report maintains an "Outperform" rating for the company [2][53]. Core Insights - The company is a leader in IT infrastructure, focusing on high-performance servers and actively promoting a domestic ecosystem [5][54]. - The merger with Hygon is expected to provide significant growth opportunities, with projected EPS of RMB 1.71, 2.16, and 2.62 for 2025-2027 [5][12]. - The global server market is anticipated to reach USD 366 billion in 2025, with a year-on-year growth of 44.6%, indicating strong demand for servers [55][26]. Financial Summary - The total revenue is projected to be RMB 14,353 million in 2023, with a forecasted growth to RMB 20,522 million by 2027, reflecting a compound annual growth rate (CAGR) of 15.8% [4]. - Net profit attributable to the parent company is expected to grow from RMB 1,836 million in 2023 to RMB 3,830 million in 2027, with a CAGR of 21.3% [4]. - The company's earnings per share (EPS) is projected to increase from RMB 1.25 in 2023 to RMB 2.62 in 2027 [4]. Market Position and Growth - The company has a strong presence in high-end computing, storage, liquid cooling, security, and data centers, with significant market share [54][16]. - The Chinese semiconductor memory market is expected to grow from RMB 394.3 billion in 2023 to RMB 458 billion in 2025, indicating a stable growth trajectory [56][37]. - The company is actively developing independent software and hardware to reduce reliance on external supply chains, enhancing product performance and stability [55][34]. Product and Service Development - The company offers a comprehensive range of storage products, including ParaStor distributed storage and FlashNexus centralized flash storage, which are expected to benefit from the growing market [56][44]. - Recent innovations include AI workstations and liquid cooling storage solutions, which enhance performance and energy efficiency [22][44].

Investment Rating - The report initiates coverage with a rating of "Accumulate" for the company [6]. Core Insights - The company is a leader in IT infrastructure, actively promoting a domestic ecosystem in the server and storage sectors, which are expected to maintain high growth [2][11]. - The merger with Haiguang Information is anticipated to provide significant growth opportunities, with projected EPS for 2025-2027 being 1.71, 2.16, and 2.62 yuan respectively [11][18]. - The target price for the company is set at 133.91 yuan based on valuation methods including PE and PS [21]. Financial Summary - Total revenue is projected to grow from 14,353 million yuan in 2023 to 20,522 million yuan in 2027, with a CAGR of approximately 15.8% [5]. - Net profit attributable to the parent company is expected to increase from 1,836 million yuan in 2023 to 3,830 million yuan in 2027, reflecting a CAGR of 21.3% [5]. - The company’s net asset return rate is forecasted to rise from 9.8% in 2023 to 13.5% in 2027 [5]. Revenue and Profit Forecast - The IT equipment business is expected to see revenue growth of 15%, 18%, and 16% for 2025-2027, with gross margins of 28.34%, 29.34%, and 30.34% respectively [15][16]. - The software system integration and technical services related to high-end computers are projected to grow at rates of 12%, 15%, and 14% for the same period, with stable gross margins [15][16]. Industry Overview - The server market in China is projected to reach 249.21 billion yuan in 2024, with a year-on-year growth of 41.3%, and is expected to grow to 282.35 billion yuan in 2025 [15]. - The global server market is anticipated to reach 366 billion USD in 2025, with a year-on-year growth of 44.6% [32]. - The storage market in China is also expected to grow steadily, with the semiconductor storage market projected to reach 458 billion yuan by 2025 [41]. Competitive Landscape - The domestic server market is dominated by local manufacturers, with Inspur holding a 30.8% market share in the x86 server segment in 2024 [45][49]. - The company’s storage products include a comprehensive range, such as ParaStor distributed storage series and FlashNexus centralized all-flash storage series, which are well-positioned to benefit from market growth [47].