Sugon(603019) 国信证券·2024-06-02 07:00Investment Rating - The report assigns a "Outperform" rating to Sugon (603019 SH) with a target price range of 40 2-43 0 yuan [1][4] Core Views - Sugon achieved 14 353 billion yuan in revenue (+10% YoY) and 1 836 billion yuan in net profit attributable to shareholders (+19% YoY) in 2023 [1] - In Q1 2024, revenue reached 2 48 billion yuan (+8% YoY) with net profit of 143 million yuan (+9% YoY) [1] - The company maintains stable gross margins (26 26% in 2023) while increasing R&D investment (9 17% of revenue) [1] - Sugon is strategically positioned in AI computing power with its GPU deep learning platform and national integrated computing power service platform [1] - The company has built a comprehensive "chip-device-cloud" industrial ecosystem covering upstream, midstream, and downstream businesses [1] Business Performance Financial Highlights - 2023 gross margin remained stable at 26 26% with IT equipment margin improving to 21 88% (+2 22pct YoY) [1] - Operating cash flow surged to 3 51 billion yuan in 2023 (+212 02% YoY) [14] - Contract liabilities decreased to 567 million yuan (-74 88% of total assets) due to revenue recognition [14] Segment Performance - High-performance computing remains the core business, contributing 79 73% of total revenue in 2023 [17] - Storage business achieved 1 337 billion yuan revenue in 2023 with 27 72% gross margin [17] - Software development and system integration maintained high margins at 61 79% despite a 12 94pct YoY decrease [1] Industry Position - Sugon is a leader in domestic computing power scheduling and construction [1] - The company has established strong customer relationships with key clients in telecom, finance, and energy sectors [8] - Its AI technology stack DASDAS forms the core of Sugon's software ecosystem [1] Future Outlook - Revenue is projected to grow to 16 881/19 341/21 860 billion yuan in 2024E/2025E/2026E [2] - Net profit is expected to reach 2 030/2 312/2 682 billion yuan in 2024E/2025E/2026E [2] - High-performance computing business is forecasted to maintain 20%/16%/14% growth in 2024-2026 [16] - Storage business is expected to grow at 12% annually with stable 27% gross margin [16] Valuation - The report uses PE valuation method with comparable companies Inspur and Unisplendour [23] - 2024E PE is estimated at 29-31x, in line with industry average of 28x [23] - Target price range of 40 2-43 0 yuan represents 29-31x 2024E PE [23]