Hygon Information Technology (688041)2025-03-12 13:43Investment Rating - The report maintains an "Outperform the Market" rating for the company [6][4]. Core Views - The company achieved significant year-on-year growth in revenue and profit for 2024, with total revenue reaching 9.162 billion, up 52.4%, and net profit attributable to shareholders at 1.931 billion, up 52.9% [8][4]. - The company is expected to benefit from the expansion of capital expenditures by major internet firms, particularly in AI infrastructure, which will drive demand for its DCU products [3][4]. Financial Performance Summary - For 2024, the company reported a gross margin of 63.7%, an increase of 4.1 percentage points year-on-year, attributed to product iterations and increased sales volume [9]. - The net profit margin for 2024 was 29.7%, reflecting a year-on-year increase of 1.4 percentage points [9]. - The company’s R&D personnel increased by 31.4% year-on-year to 2,157 by the end of 2024, contributing to rising R&D expenses [8]. Revenue and Profit Forecast - The company’s revenue is projected to grow to 13.935 billion in 2025, 19.526 billion in 2026, and 24.527 billion in 2027, with corresponding net profits of 3.175 billion, 4.860 billion, and 6.161 billion respectively [4][5]. - The report indicates a significant increase in earnings per share, expected to reach 1.37 in 2025 and 2.09 in 2026 [5]. Market Position and Future Outlook - The company’s DCU products have been fully adapted to several leading internet firms, positioning it well to capitalize on the anticipated increase in AI infrastructure investments [3][4]. - The report highlights that major internet companies are expected to increase their capital expenditures significantly, with Alibaba alone projected to invest over 380 billion in AI hardware infrastructure over the next three years [3].