Zhejiang Zhaolong Interconnect Technology (300913) 华鑫证券·2025-01-14 01:21Investment Rating - The report assigns a "Buy" investment rating for the company [3][12]. Core Insights - The company is experiencing continuous product structure upgrades and expanding its influence in the global market, particularly in digital communication cables [4]. - The company has a strong technical reserve with complete independent design and R&D capabilities, having developed a comprehensive system design capability over 30 years in the digital communication field [6][7]. - The company is strategically positioning itself in the high-speed cable market to seize new opportunities in AI and data center interconnects, with significant growth expected in the DAC and AEC segments [8][10][11]. Summary by Sections Market Performance - The company is diversifying its main business, focusing on digital communication cables, with revenue from various product categories showing growth: 6A and below data communication cables at 4.55 billion, 6A and above at 1.88 billion, specialized cables at 0.69 billion, and connection products at 0.77 billion for the first half of 2024, with year-on-year growth rates of 1.48%, 37.10%, 17.23%, and 58.06% respectively [4]. - The revenue share of high-speed and specialized cables is increasing, with gross margins of 16.09%, 29.40%, and 30.06% for 6A and above data communication cables, specialized cables, and connection products respectively [4]. Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 4.90 billion, a year-on-year increase of 18.87%, and a net profit of 0.30 billion, up 35.89% year-on-year [5]. - The gross margin and net margin for the first three quarters of 2024 were 15.91% and 6.70%, reflecting increases of 5.93 percentage points and 9.30 percentage points year-on-year [5]. Technical Capabilities - The company has developed a complete system design capability in various areas including cables, structures, and automation, and has passed third-party testing for its cabling systems [7]. - The company is advancing in high-speed interconnect products, with 800G component products currently in small batch testing [10]. Market Outlook - The high-speed cable market is projected to double in size over the next five years, reaching 2.8 billion USD by 2028, with DAC and AEC sales expected to grow at compound annual growth rates of 25% and 45% respectively [8][10]. - The company is focusing on AEC high-speed component products to meet the growing demand from data centers, with single-channel 112G products already being delivered in batches [11]. Profit Forecast - The company’s revenue is forecasted to be 18.61 billion, 22.23 billion, and 26.74 billion for 2024, 2025, and 2026 respectively, with corresponding EPS of 0.48, 0.63, and 0.80 [12].