Huaxi Securities: Initiates coverage of Shannon Semiconductor with a "Buy" rating, benefiting from both its distribution and products businesses.

Huaxi Securities research report pointed out that Shannon Xin Chuang is a leading domestic electronic component distribution company, specializing in high-end storage areas. Currently, driven by AI, the market size and demand for storage chips are expected to further expand. As a core distributor of domestic storage manufacturers, the company is expected to fully benefit from the industry's upturn cycle and the expansion of high-end storage demand brought about by the growth of the storage market. In 2023, the company jointly established Haipu Storage with companies such as Shenzhen Dapuwei. Currently, the development progress is smooth, and the research and trial production of enterprise-level DDR4, DDR5, and Gen4eSSD have been completed, which will be used in cloud computing storage and other fields. The company has already completed certification and adaptation work for some of the major domestic server platforms and has officially entered the product mass production stage. With the expansion of enterprise-level storage demand, the company is expected to open up growth space through the establishment of Haipu Storage. First coverage, with a "hold" rating.