China Securities Co., Ltd. has given KARRIE INT'L (01050) a "buy" rating. AI has brought about a simultaneous increase in the volume and price of the server chassis market.
This line indicates that the company's revenue and profit entered an upward growth trajectory in the year 2024/25.
China Securities Co., Ltd. issued a research report stating that it is covering KARRIE INT'L (01050) for the first time, giving it a "buy" rating. It is expected that the company's revenue for the fiscal years 2025/26, 2026/27, and 2027/28 will be HK$3.45 billion, HK$4.5 billion, and HK$5.4 billion respectively, with the equity holder's share of profits being HK$250 million, HK$470 million, and HK$660 million respectively. AI is driving growth in the server chassis market. The company is actively expanding its product categories and customer base, and its AI server chassis products are making good progress with traditional OEM, NVIDIA, CSP, and other customers. The company is also deepening its global presence, with the Thailand factory expanding production to meet future demand. Expectations for growth in the AI server business are optimistic.
The report states that AI is driving an increase in demand and prices in the server chassis market: 1) AI is increasing the demand for GPU and ASIC servers; 2) AI servers require higher reliability and cooling, leading to an expected increase in the unit price of chassis products; 3) Because AI server chassis products have higher performance requirements and faster iteration speeds, profitability is also expected to increase. Estimates put the global market size for general server chassis at $1.37 billion to $2.05 billion. Based on assumptions of 5 million GPUs and 5 million ASICs, the corresponding new AI server chassis market size is estimated to be $750 million to $1 billion.
The company is one of the earliest suppliers to enter the server chassis market and holds a leading position in the global server chassis production market, with clients including HP, Lenovo, IBM, Dell, ZTE, and other globally renowned brands. The company is actively expanding its AI server product portfolio and has made good progress with traditional OEM, NVIDIA, CSP, and other customers. The company has been included in NVIDIA's list of qualified suppliers for server chassis and cabinet components, and is working towards delivering more prototype products to NVIDIA in the coming months. Regarding CSPs, the company expects new orders to be entered in 2025.
The report mentioned that the company's revenue and profit entered an upward growth channel in the fiscal year 2024/25. In the fiscal years 2022/23 and 2023/24, the company's growth was under pressure due to factors such as the macroeconomic environment, rising raw material costs, high industry inventory levels, and weak consumer/investment willingness. The development of AI brings new industrial opportunities, and the company is actively adjusting to seize these opportunities while continuing to expand its products and customer base, and deepening its global presence. In 2024/25, the company achieved revenue of HK$3.23 billion, a year-on-year increase of 10.8%, and achieved a profit attributable to equity holders of HK$204 million, a year-on-year increase of 20.5%, with performance entering an upward growth channel.
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