\u3000\u30 Jinzai Food Group Co.Ltd(003000) 65 Beijing Highlander Digital Technology Co.Ltd(300065) )
[key points of investment]
China's leader in navigation intelligence and marine informatization is about to enter a new era of development. Since its establishment for more than 20 years, the Chinese company has always focused on the field of ocean observation and exploration and intelligent navigation. It has established a complete and leading product system in the fields of ship navigation, deep-sea exploration, ocean sensors, marine information systems and other fields, which are widely used in civil and military markets. In recent years, the company has continued to develop innovative businesses, and has made smooth progress in businesses such as intelligent ship, marine three-dimensional monitoring, marine big data, Seabed Data Center (UDC) and marine entertainment. It is expected to become an important growth point of the company's performance in the future. In the first three quarters of 2021, the company's revenue increased by 17.85% year-on-year to RMB 571 million, and the net profit attributable to the parent company was RMB 9.2697 million, a year-on-year decrease of 74.48%. It is mainly affected by the delayed delivery of orders, the price rise of upstream raw materials, convertible bonds and equity incentive fees.
The supply and demand of core resources in the data center industry are approaching, and low-carbon green solutions are urgently needed. Data center is the physical carrier of data flow. In the era of digital economy, it has become the key investment direction of cloud computing manufacturers' capital expenditure, and the scale of global data center continues to expand. However, the data center contains a large number of high-performance IT equipment and heat dissipation and refrigeration equipment, and the level of energy consumption and carbon emission is high, which affects the process of carbon peak and carbon neutralization to a certain extent. Many provinces and cities in China have issued and formulated industry standards and imposed strict requirements on pue. With the tightening of approval, the supply and demand in developed regions are tightening, and there is an urgent need for low energy consumption Energy efficient low-carbon green data center solution.
UDC is ready for commercialization, and the company has a significant first mover advantage in China. Microsoft has invested in UDC for many years and successfully tested it. The feasibility of UDC commercialization has been fully verified. Compared with onshore data centers, it has significant advantages in energy efficiency and meets the requirements of global carbon neutralization and carbon peak route. The company completed the acquisition of Ott ocean in 2020. It once participated in Microsoft UDC project. Based on the core capabilities of Ott ocean, the company actively promoted the implementation of China UDC. At present, the project in Hainan Province is progressing smoothly. Under the background of stricter approval of China data center, the market prospect of "dongshuhaisuan" represented by UDC is broad, The company has a significant first mover advantage and is expected to benefit directly.
China seabed observation network is expected to start large-scale construction, and the company has localization capacity in key links. Seafloor observation network is the third ocean observation platform except ships and remote sensing satellites. At present, the construction of seafloor observation network in developed countries such as Europe, America and Japan has been completed. China's largest seafloor observation network was officially approved to be established in 2017, and many provinces have also included it in the 14th five year plan for marine economic development. On the whole, the construction of China's seafloor observation network is still in its infancy, and the localization rate is low, There is still a very large market potential. Ott ocean acquired by the company has mature submarine connection system and equipment products, including submarine connection box, instrument platform, submarine instrument interface module, etc. its technical team has undertaken the research and development and construction of submarine observation network projects in many well-known countries in the world and has rich experience. The company has carried out domestic research and development of relevant products based on Ott ocean products and technical capabilities, It is expected to fill the gap in relevant fields in China and occupy a certain share in the Chinese market
[investment suggestions]
The first phase of the company's submarine data center project is close to landing, which is the first commercial application in China. Under the route of global carbon neutralization and carbon peak, the excellent low-carbon green data center solution is expected to be promoted on a large scale. The company has a significant first mover advantage in this field. During the 14th Five Year Plan period, the relevant revenue is expected to grow rapidly, bringing important increments to the company's performance. With reference to the progress of the company's project planning and promotion, compared with the previous report, we raised the company's revenue forecast, raised the expenses during 2021, lowered the company's profit forecast for 2021, and raised the profit forecast for 20222023. It is estimated that the company's operating revenue from 20212023 will be RMB 1.011 billion, RMB 1.412 billion and RMB 2.573 billion, and the net profit attributable to the parent company will be RMB 42 million, RMB 113 million and RMB 251 million, EPS is 0.07, 0.18 and 0.4 yuan, corresponding to 194, 72 and 33 times of PE. We are cautiously optimistic about the future performance of the company and maintain the "overweight" rating.
[risk tips]
The risk of goodwill impairment when the performance of the acquired company is less than expected;
The progress of submarine data center project is less than expected;
The effect of Seabed Data Center after landing is not as expected;
The downstream demand of traditional business is lower than expected;
Core technology and personnel turnover.
