Investment Highlights:

Domestic CPU and DCU are both leading, with significant technical and ecological advantages. Haiguang Information was founded in 2014, in 2016 obtained AMD technology authorization to start CPU product research and development, based on AMD's authorized technology and Haiguang's self-research capabilities, the company adheres to the strategy of "sales generation, verification generation, research and development generation", and continues to iterate Haiguang series CPU and deep computing series DCU products, and the main CPU products Haiguang No. 3 and DCU product Shensu No. 2 have achieved mass production. In terms of technology, the company continues to invest heavily in research and development, and its product performance keeps up with the world's first-line level, and maintains a leading position among domestic manufacturers. In terms of ecology, the company's CPU is based on the well-established x86 architecture, and the platform and architecture of the DCU are highly compatible with CUDA, which can realize seamless switching of overseas products.

CPU performance and ecology continue to lead the domestic market, and the acceleration of information innovation promotes the continuous improvement of localization rate.

Based on the authorization of AMD Zen1 architecture, the company's first-generation product Haiguang No. 1 has achieved generational leadership compared with the domestic CPU in the same period, and the performance of the main product Haiguang No. 3 has been improved in an all-round way compared with the previous generation, and the comprehensive product performance continues to lead the domestic market. At the same time, in terms of ecology, the company's CPU adopts x86 architecture, which has a higher ecological maturity compared with ARM and self-developed instruction set architecture, and can realize seamless switching of upper-layer system software and application software. At present, the total domestic server and desktop CPU market has reached 100 billion yuan, and there is a broad space for domestic substitution. With the continuous strengthening of financial support for information innovation and the approaching mid-term node of the industry, the two major factors are expected to jointly promote the acceleration of industry information innovation, and at the same time, the localization rate of CPU, as a key area of information innovation, is expected to increase rapidly.

AI chips are among the first echelon in China, fully benefiting from the wave of domestic AI computing power industry. In the past, the company's DCU chips Shensuan No. 1 and Shensuan No. 2 were mainly used in high-performance computing fields such as supercomputing centers, and were leaders in the field of supercomputing chips in China. In order to make up for the shortcomings of DCU in large model training and inference scenarios, the company is developing the latest generation of DCU product, Shensuan No. 3, which is expected to have several times higher AI performance than Shensuan No. 2, and is expected to rank among the first echelon of domestic AI chips. The company's DCU adopts GPGPU architecture, and the software platform DTK is highly compatible with the CUDA ecosystem, which can widely adapt to international mainstream AI frameworks and application software, and at the same time, a large number of international mainstream open source components are used to reduce the difficulty of ecological expansion. With the continuous increase in the investment in AI computing power in the domestic Internet and intelligent computing centers, and the continuous increase in the US chip export control policy, the company is expected to fully benefit from the wave of localization of AI computing power.

Profit forecast, valuation analysis and investment advice: As a domestic CPU and DCU leader, the company is expected to fully benefit from the continuous improvement of the localization rate of the CPU and DCU market, and it is expected that the company's net profit attributable to the parent company in 2025-2027 will be 29.45/42.28/5.647 billion yuan, a year-on-year increase of 52.5%/43.6%/33.6%, corresponding to EPS of 1.27/1.82/2.43 yuan, and PE of 111.31/ 77.54/58.06x, maintaining a "Buy-A" rating.

Risk warning: the risk of high customer concentration; supply chain risk; the risk of rising prices of key raw materials; New product research and development progress is not as expected.