HON-Flex(300657) 民生证券·2024-09-28 23:30Investment Rating - The report gives a "Buy" rating for the company, with a target price of 14.77 CNY [4]. Core Views - Hongxin Electronics is a leading enterprise in the flexible electronics industry in China, focusing on FPC (Flexible Printed Circuit) research, design, manufacturing, and sales for over 20 years. The company achieved a revenue of 3.478 billion CNY in 2023, a year-on-year increase of 24.56% [2][12]. - The company is experiencing significant growth driven by the return of major clients and the expansion of its AI computing power rental business, which generated 1.29 billion CNY in profit in the first half of 2024 [2][16]. - The FPC market is expected to grow at a CAGR of 4.4% from 2023 to 2028, reaching 15.1 billion USD by 2028, with increasing demand from consumer electronics and new energy sectors [2][34]. Summary by Sections FPC: Dual Growth Drivers of Consumption and New Energy - FPC is a crucial component in the PCB industry, characterized by high wiring density, lightweight, and flexibility, with applications in smartphones, automotive electronics, and computing power [2][26]. - The company has established itself as a core supplier for Huawei's Mate 60 series screens, indicating strong prospects for high-end FPC products [2][14]. - The FPC market is projected to reach 15.1 billion USD by 2028, with a CAGR of 2.65% from 2024 to 2028, highlighting the long-term upward trend in the industry [34][35]. Intelligent Computing Center: Broad Development Prospects - The intelligent computing power market is rapidly growing, with China's computing power expected to reach 1117.4 EFLOPS by 2027 [2][12]. - The company is investing 1 billion CNY to build an AI computing server manufacturing base in Gansu, aiming to produce 100,000 AI servers annually [2][12]. - The company has signed a 3-year, 300 million CNY computing power service agreement with Capital Cloud, indicating strong future growth potential in the computing power rental business [2][12]. Financial Forecast and Investment Recommendations - The company is expected to achieve revenues of 6.703 billion CNY, 9.232 billion CNY, and 11.377 billion CNY for 2024, 2025, and 2026, respectively, with corresponding net profits of 153 million CNY, 441 million CNY, and 764 million CNY [3][5]. - The report anticipates a significant recovery in the FPC business due to the return of major clients and the growth of the computing power rental business, leading to a "Buy" rating [2][5].