Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company is set to absorb and merge with Zhongke Shuguang, aiming to create a world-class intelligent computing center [5][6] - The merger is expected to enhance the company's capabilities in the chip sector and integrate resources from Zhongke Shuguang in machine and data center infrastructure [5][6] - The transaction will simplify governance structures and optimize resource allocation, leading to improved operational efficiency and shareholder returns [7] Summary by Sections Recent Performance - The company's stock performance over the last year shows a 91.0% increase compared to the benchmark index, CSI 300, which only increased by 9.6% [3] - As of June 13, 2025, the current stock price is 137.06 yuan, with a market capitalization of approximately 318.57 billion yuan [3] Merger Details - The merger involves a share exchange where the company will issue A-shares to Zhongke Shuguang's shareholders at a premium of 10% [5] - The exchange ratio is set at 1:0.5525, with the company's share price for the exchange at 143.36 yuan per share [5][8] Financial Projections - Revenue projections for 2025-2027 are estimated at 147.93 billion yuan, 220.54 billion yuan, and 306.90 billion yuan respectively, with corresponding net profits of 31.70 billion yuan, 48.34 billion yuan, and 73.23 billion yuan [9][10] - The expected EPS for the same period is projected to be 1.36 yuan, 2.08 yuan, and 3.15 yuan [9][10] Strategic Advantages - The merger is anticipated to create a closed-loop layout from high-end chip design to complete computing systems, enhancing the company's overall strength in the intelligent computing ecosystem [6][7] - The integration of Zhongke Shuguang's AI capabilities and applications is expected to drive long-term growth and operational synergies [6][7]