Nomura maintains Buy on Unisplendour Corporation and raises the target price to CNY51

Overview

This report is a company research and rating revision note on Unisplendour Corporation by Nomura. The key conclusion is to maintain a Buy rating and raise the target price to CNY51.00. Nomura sees faster Chinese AI data-center investment, strengthening domestic AI supply chain, rising demand for AI servers and high-end switches, and greater global expansion potential after further integration of H3C as key drivers for faster business growth and upward revisions to earnings.

Core views

Nomura believes Unisplendour Corporation is well positioned in China’s AI value chain and a key participant in the AI server and network-switch markets. China’s AI investment may gradually catch up with global levels, with strong policy support for building a domestic AI supply chain, and upgrades in SuperNode, high-end switches, and optical products are expected to generate incremental demand. Although the market may be concerned that the white-label trend could pressure margins, the report argues that premium migration toward higher-end products should partially offset product mix pressure. Further consolidation of H3C is also expected to alleviate business overlap concerns with its former JV partner HPE and clear obstacles to global expansion.

Analysis framework

The report applies a framework combining fundamental earnings upward revisions with relative valuation analysis. The fundamental section focuses on 1H26 earnings guidance, AI data-center capex, growth of network equipment and server divisions, H3C integration, overseas revenue growth, and gross margin changes; the valuation section calculates the target price using FY27F EPS and the median P/E ratio for China A-share server and network-switch peers.

Methodology notes

• Valuation methodologyP/E multiple valuation

  40x FY27F EPS

  Nomura sets the target price at CNY51.00 based on FY27F EPS of CNY1.28 and a 40x target P/E ratio, consistent with the median P/E of the WIND China A-share server and switch peer group.

• Earnings forecastSegment revenue and profit forecasting

  FY26-28F revenue and earnings upgrades

  The report raised FY26-28F revenue forecasts by 17.1%-47.9% and earnings forecasts by 32.1%-51.3%, mainly reflecting faster growth in AI server and switch businesses.

• Relative performanceBenchmark index comparison

  CSI300

  The valuation benchmark disclosed is CSI300; the Buy rating indicates the analyst expects the stock to outperform the benchmark over the next 12 months.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Unisplendour Corporation (000938.SS)

  Core covered name

  Strengths

  Positively positioned in China’s AI server and network-switch markets, benefiting from accelerated AIDC capex, domestic substitution, high-end switch and optical product upgrades, and further integration of H3C.

  Weaknesses

  AI server gross margins are lower than those of network switches; faster server revenue growth could create product-mix pressure; the white-label trend may compress margins.

  Comparison

  The report states that the company’s FY26-28F revenue and earnings forecasts are 5%-7% and 5%-13% above WIND consensus, indicating Nomura is more optimistic than the broader market.

  Risks

  Uncertainty around H3C equity acquisition, geopolitical risks, and margins falling more than expected due to the white-label trend.

• H3C

  Key consolidation asset

  Strengths

  Further consolidation may support overseas expansion and help ease concerns of business overlap with HPE.

  Weaknesses

  Uncertainty around equity acquisition and integration execution.

  Comparison

  As a critical part of Unisplendour Corporation’s global expansion thesis, it is expected to open more room for overseas revenue growth than a purely domestic strategy.

  Risks

  If the acquisition or integration does not proceed smoothly, it could hinder overseas expansion and market sentiment.

• China AI server and switch value chain

  Upside catalyst

  Strengths

  Accelerating AI investment in China, SuperNode upgrades, and large cloud customer technology upgrades could lift demand for high-end switches, optical products, and servers.

  Weaknesses

  Industry competition and white-label trends may pressure pricing and margins.

  Comparison

  Nomura uses the median P/E ratio of China A-share server and switch peers as a valuation reference.

  Risks

  Lower-than-expected AI investment pace or weaker-than-expected technology upgrade demand would weaken growth support.

Key data

• RatingBuyNomura maintains a Buy rating.
• Target priceCNY51.00Raised from the previous CNY32.00.
• CloseCNY38.40Price date is 2026-07-13.
• Implied upside+32.8%Based on a target price of CNY51.00 and a close of CNY38.40.
• 1H26 earnings guidanceCNY1.91bn-CNY2.32bnYear-over-year growth of 83.5%-122.9%.
• 1H26 recurring earnings guidanceCNY1.61bn-CNY2.02bnAfter excluding CNY250mn-CNY350mn in non-operating gains related to the H3C acquisition, year-over-year growth is 44.02%-80.69%.
• FY26-28F revenue forecast adjustment+17.1%-47.9%Reflects faster growth in AI server and switch businesses.
• FY26-28F earnings forecast adjustment+32.1%-51.3%Nomura’s new forecasts are materially above its prior estimates.
• FY27F EPSCNY1.28Used for target-price valuation.
• FY28F Network Equipment and Server sales contribution84%The report expects these two businesses to be the main sources of revenue.
• Overseas revenue CAGR41%The report expects overseas revenue CAGR in FY26-28F to be higher than China’s 13%.

Impact & implications

If the report’s thesis plays out, Unisplendour Corporation’s investment logic would broaden from mainly benefiting from domestic ICT demand to being a comprehensive beneficiary of China’s AI infrastructure upgrade, domestic substitution, and global expansion. The combination of upward revisions to earnings forecasts and a higher valuation multiple strengthens the constructive view, but full valuation realization still depends on the intensity of AI capex, the pace of H3C integration, high-end product penetration, and margin stability.

Risks

• H3C equity acquisition uncertainty may affect Unisplendour Corporation’s global expansion.
• Geopolitical tensions may have a more adverse impact than expected.
• An acceleration in the white-label trend may lead to greater margin compression than expected.
• Faster growth in AI server revenue than switches could create product-mix pressure because AI servers carry lower gross margins than network switches.
• Target-price achievement may be affected by overall market, macro trends, and earnings deviating from forecast.

What to watch

• Whether 1H26 reported results fall within the guided earnings range and whether recurring earnings growth remains sustainable.
• The pace of China’s AI data-center capex ramp and delivery of policy-related or order-related milestones tied to potential CNY2tn AI investment.
• The growth pace of demand for AI servers, switches, high-end optical products, and SuperNode-related opportunities.
• Progress of H3C remaining equity acquisition and integration, and the actual impact on global expansion.
• The impact of white-label competition on gross margins and whether high-end product upgrades can offset margin dilution.
• Whether overseas revenue growth is close to the report’s FY26-28F 41% CAGR.