Stock abbreviation: Insigma Technology Co.Ltd(600797) securities code: 600797 No.: 2022-010 Insigma Technology Co.Ltd(600797)
Announcement on the reply to the inquiry letter of Shanghai Stock Exchange
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
On January 26, 2022, the company received the inquiry letter on Insigma Technology Co.Ltd(600797) performance forecast issued by Shanghai Stock Exchange (szgh [2022] No. 0069). The company has carefully checked and implemented the relevant issues concerned in the inquiry letter one by one. The replies to the relevant questions are as follows:
1. The announcement disclosed that in 2021, affected by the continuous decline of the accelerated business of Internet resources, the business layout, pricing mode and price reduction of IDC and cloud computing service key customers, the performance of Huatong cloud data decreased significantly, and the future profitability was lower than expected. The company plans to make provision for goodwill devaluation, which is expected to reduce the net profit by 570 million yuan to 660 million yuan. The company is requested to make supplementary disclosure: (1) analyze and explain the changes of main financial data such as revenue and profit of Huatong cloud data over the years since the acquisition, the reasons for the difference from the profit forecast, and whether the relevant factors can be expected in the early stage in combination with the orders on hand, market demand, dependence on key customers, changes in the competition pattern and the operation of Companies in the same industry; (2) The detailed process of this goodwill impairment test, including key assumptions, main parameters, prediction indicators and specific conditions, whether there are significant changes and reasons in the selection of relevant assumptions, parameters and indicators compared with the acquisition and early impairment test; (3) Combined with the above situation, fully explain the reason and rationality of the large amount of goodwill impairment provision made by chinacloud data this time.
reply:
(I) analyze and explain the changes of main financial data such as revenue and profit of Huatong cloud data over the years since the acquisition, the reasons for the difference with the profit forecast, and whether the relevant factors can be expected in the early stage
1. Business scope and business distribution of Huatong cloud data
Zhejiang Huatong Cloud Data Technology Co., Ltd. (hereinafter referred to as “Huatong cloud data”), a wholly-owned subsidiary of the company, is an IDC third-party independent operator, which mainly provides customers with IDC hosting services, Internet resource acceleration services and cloud computing services. The specific business model is as follows:
Business type business model
Provide server hosting and value-added maintenance services for customers through their own or rented computer rooms
IDC hosting service depends on the type of leased cabinet (cabinet types mainly include 3KW, 4.5kw, 8kw, 12KW, etc.)
The rent shall be paid monthly for the same power level (standard configuration) and quantity.
Internet resources and relying on its own data center, introduce Internet content resources from Internet content providers to form mutual trust
The fast service networking content resource pool can push the Internet more quickly for radio and television operators and customers through intelligent scheduling
Network content resources, and charge according to the resource traffic ordered by customers.
Relying on its own data center, through the purchased virtualization technology software and independently developed cloud management platform
Cloud computing services and operation and maintenance technical services build physical resources such as servers and networks to provide cloud computing and cloud storage
The resource pool for storage, big data and other services provides services to users on demand, and rents resources according to users
Category, usage and service cycle charge of.
Since the acquisition, the main financial data such as the revenue and net profit of each business segment of Huatong cloud data over the years are as follows:
Monetary unit: 10000 yuan
Project / year 2017 2018 2019 2020 2021
(Unaudited)
Operating income 68648.17 64325.00 54271.97 53811.74 57205.84
Including: IDC business 41318.50 40336.70 33894.64 32695.88 36347.44
Internet resource acceleration
Business 14328.75 13963.67 9182.95 8467.60 3245.50
Cloud computing service 8389.00 7192.17 9455.95 11187.87 14762.54
Other income 4611.92 2832.46 1738.43 1460.39 2850.36
Owned by the parent company
Net profit of 15212.07 11681.80 8148.92 5920.95 3100.00
From 2016 to 2021, the shelves of computer rooms and cabinets operated by Huatong cloud data in various places are as follows:
Number of regional cabinets by the end of 2017 by the end of 2018 by the end of 2019 by the end of 2020 by the end of 2021 number of cabinets by the end of 2021 name distribution of machine room (as of December 31, 2016) shelf rate shelf rate shelf rate shelf rate shelf rate shelf rate 2021.12.31)
Qiandaohu phase I machine room Hangzhou 1235 95.32% 95.40% 95.56% 95.56% 93.63% 1240
Qiandaohu phase II machine room Hangzhou – 0.00% 0.00% 0.00% 69.80% 29.23% 496
Bauhinia machine room (2019 Hangzhou 398 60.24% 59.91% —
(demolished in May)
Zhuantang machine room Hangzhou 1136 96.05% 89.42% 32.88% 70.81% 63.76% 1134
Qingshanhu machine room Hangzhou 1334 90.79% 86.33% 90.10% 85.43% 86.12% 1434
Shanghai Jinqiao machine room Shanghai 743 83.04% 86.54% 61.16% 32.26% 32.80% 744
Xixi machine room Hangzhou – 6.50% 21.17% 55.57% 73.21% 68.55% 601
Zh12 machine room B building Hangzhou —– 62.31% 1032
Shanghai Zhangjiang computer room — 27.63% 76.32% 532
Total 4846 80.44% 79.98% 70.79% 71.01% 68.89% 7213
Note: 1. According to the government plan, the Bauhinia machine room will be demolished successively from 2017 to 2019;
2. The total number of design cabinets of Qiandaohu phase II machine room is 1365. At the time of acquisition, the machine room is a customized machine room, with houses and warm rooms
The main parts of infrastructure projects such as power supply and power supply have been completed, so the progress of their completion and cabinet shelving was expected to be optimistic at that time.
In fact, due to the failure of major customers to put on the shelves as expected, Qiandaohu phase II began to build cabinets by stages at the end of 2019 and then sold to retail customers. 245 cabinets will be built in 2020, and 251 newly built cabinets will be completed in 2021 and have not been put into operation;
3. In the second half of 2019, the transfer pond machine room was partially reconstructed, resulting in a decline in the shelf rate at the end of the year;
4. In 2019, Shanghai Jinqiao computer room did not have enough vacant cabinets to meet the capacity expansion needs of individual users, which was lost due to the overall relocation of the users, resulting in a decline in the shelf rate at the end of the year;
5. The number of the above cabinets is counted according to the number of physical cabinets, which is not converted into the number of standard cabinets;
6. Shelf rate at the end of the period = number of cabinets in use at the end of the year / total number of cabinets at the end of the year.
2. Forecast and basis of various businesses at the time of acquisition
(1) IDC business
In 2016, the IDC market was in a period of rapid development. According to the data of China’s IDC circle, the scale of China’s IDC market reached 37.22 billion yuan in 2014, with a year-on-year growth rate of 41.8%. In 2015, the total scale of China’s IDC market was 51.86 billion yuan, with a year-on-year growth of 39.3%. National broadband speed increase, the Internet industry sustained rapid growth, Internet plus to accelerate the penetration of industries and other factors have stimulated the growth of demand for data infrastructure and other Internet infrastructure. China’s IDC circle predicts that the growth rate of China’s IDC market scale from 2016 to 2018 is 38.1%, 39.1% and 39.6% respectively.
Huatong cloud data is a third-party independent operator of IDC. Its IDC business includes the whole life cycle of data center design, construction, hosting and operation and maintenance. It belongs to an industry with heavy asset investment. After the construction of the data center is completed, the income mainly comes from the rental of cabinets, while the cost mainly comes from the depreciation of fixed assets and the cost of power consumption. The completed computer rooms at the time of Huatong cloud data acquisition include Zhuantang computer room, Bauhinia computer room, Qingshanhu computer room, Qiandaohu computer room and Jinqiao computer room. All the computer rooms have entered a stable operation period. The predicted revenue growth of IDC business in the next year is mainly the revenue growth brought by the expected launch of Qiandaohu phase II computer room. The prediction basis is as follows:
1) For Zhuantang machine room, Qingshanhu machine room and Qiandaohu machine room, it is predicted based on the contracts signed with major customers and combined with the development of IDC industry. There are seven contracts signed between Huatong cloud data and major customers, mainly including the host hosting product service contract, data center cooperation agreement and Qiandaohu customized IDC room cooperation contract. The contract term is up to 6 years, and the contract is valid until March 2021 at the latest. If there is no objection one month before the expiration of the contract, it will be automatically extended for 1-2 years.
2) Jinqiao computer room is a telecommunication cooperation computer room, and a cooperation agreement has been signed with Shanghai Telecom. The cooperation period will end in October 2022. The shelf rate by the end of 2016 is 87%, which is predicted to remain basically stable.
3) The computer room of Zijing building 12 is mainly government IDC customers. According to the historical annual business volume and revenue forecast, it will remain basically stable in the future. After the computer room is removed, the customers will move to the Xixi computer room under construction. The newly added cabinets in Xixi machine room have been gradually put on the cabinet in three years.
At the time of acquisition, the revenue of the top five customers in the IDC business of Huatong cloud data accounted for more than 80%. The main customers of IDC business are the leading companies in the Internet industry. Based on the long-term and stable cooperative relationship between Huatong cloud data and its main customers at the time of acquisition, IDC business is expected to grow steadily with the business development of the industry and its main customers. (2) Internet resource acceleration service
In 2016, China’s Internet penetration rate exceeded 50%, and the access rate of 20MBps and above has become the focus of high-speed broadband development. It is expected that under the guidance of the broadband telecommunications universal service compensation mechanism in rural and remote areas, the penetration rate and access rate of rural Internet will be significantly improved. At the same time, with the progress of mobile Internet technology, the improvement of user experience requirements and the current situation of the majority of network data, streaming media, video and other content, the network speed is slow and the picture is stuck
