Haitong International has issued a research report initiating coverage on HUAQIN (03296) with an "Outperform" rating and a target price of HK$104.14.

The report states that driven by industry trends in AI, HUAQIN's AI server products possess clear growth drivers, supporting sustained rapid expansion in its computing and data center business segment. The company's profitability is also showing an improving trend.

It is projected that HUAQIN's net profit for 2026 to 2028 will reach RMB 5.03 billion, RMB 6.34 billion, and RMB 7.92 billion, respectively, with corresponding earnings per share estimates of RMB 4.53, RMB 5.71, and RMB 7.14. This represents year-on-year growth of 24%, 26%, and 25%.

The report further forecasts the company's net profit margin for 2026 to 2028 to be 2.47%, 2.68%, and 2.92%, respectively, indicating that net profit growth is expected to outpace revenue growth.

According to the analysis, the company's data center business revenue exceeded RMB 20 billion in 2024, doubled to over RMB 40 billion last year, and is projected to potentially reach RMB 60 billion this year.

It is anticipated that the overall computing and data center business revenue will achieve a compound annual growth rate exceeding 25% during the period from 2025 to 2028.