investment points:

domestic CPU and DCU leading enterprises, operating conditions continue to improve Haiguang Information was established in 2014, mainly engaged in high-end processors, accelerators and other computing chip products and systems research and development. At present, the company in the general-purpose processor (CPU) and coprocessor (DCU) direction already has the sea light series, deep calculation series two mature product lines and continue to iterate upgrade. The company's operating conditions continued to improve, the company has turned a profit in 2021 net profit, 2018-2023 the company's revenue and home-to-home net profit continued to maintain the momentum of growth.

CPU performance is leading, and Xinchuang needs to expand market space

Haguang Information digests and absorbs AMD authorized technology, and now has the ability to iterate independently. By the end of 2023, the company according to different application scenarios have launched Haiguang 7000, Haiguang 5000, Haiguang 3000 three series of products, and in the product generation successfully iterated to Haiguang III.

Haiguang CPU x86 architecture, high maturity of hardware and software environment, is the mainstream choice in the field of server. With the promotion of the industrial policy of information technology application innovation, Haguang processor has emerged in the domestic processor market. With its excellent performance and ecological advantages, in the domestic server and workstation market, especially in key industries such as finance and telecommunications, Haguang CPU's collection orders accounted for a significant proportion, reflecting the company's leading position in the domestic substitution process of China's trust industry.

haiguang DCU continues to iterate. the commercial application prospect in AI field is broad. haiguang information DCU adopts the international mainstream GPGPU route and CUDA-like architecture, and can adapt to the international mainstream software, thus serving big data, artificial intelligence and other fields. Haguang DCU products for the deep calculation series, at present, deep calculation No. 1, No. 2 have been commercially available, deep calculation No. 3 is under development. Among them, the performance of Deep Calculation No. 1 is expected to reach more than 40% of the NVIDIA A100, and Deep Calculation No. 2 will be officially released in the third quarter of 2023, with an expected performance increase of 100 percent over Deep Calculation No. 1.

Haiguang DCU products have made significant progress in commercial applications, showing the application prospect under the background of AIGC development. The deep calculation series supports full-precision model training, fully adapts to large models such as Wenxin, and completes mutual certification with deep learning frameworks such as Baidu Feipaddle.

earnings forecast and investment advice

the company for the domestic computing power chip leader, but also as a domestic CPU + DCU scarce target, in the product side and ecological have a strong competitive advantage. With the rise of the domestic trust market independent control wave, as well as AI large model-driven computing chip demand burst, the industry development opportunities are good, the company as a domestic computing leader is expected to continue to expand the share of domestic substitution. We expect the company to achieve operating income of 87.0/118.4/15.1 billion yuan in 24-26 years, corresponding to the current PS valuation of 19/14/11 times, net profit of 18.2/25.9/3.6 billion yuan, corresponding to the current PE valuation of 92/65/47 times. First coverage, give a "buy" rating.

risk tips

AI demand is less than expected risk, research and development work is less than expected risk, supplier concentration is high and some suppliers to replace difficulties, customer concentration is high risk.