\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 83 Beijing Sinnet Technology Co.Ltd(300383) )
Event overview
The company released the annual report of 2021 and the first quarterly report of 2022: in 2021, the company realized an operating revenue of 7.7 billion yuan, a year-on-year increase of 2.99%; The operating profit was 950 million yuan, a year-on-year decrease of 7.69%; The net profit attributable to the parent company was 840 million yuan, a year-on-year decrease of 8.41%. In the first quarter of 2022, the company achieved an operating revenue of 1.83 billion yuan, a year-on-year decrease of 6.49% over the first quarter of last year and a month on month increase of 3.80% over the fourth quarter of 2021; The net profit attributable to the parent company was 190 million yuan, a year-on-year decrease of 13.63% over the first quarter of last year and a month on month increase of 27.04% over the fourth quarter of 2021.
Analysis and judgment:
In 2021, the main business was dragged down by the three impacts of “epidemic + education + real estate”, and there were signs of recovery in the first quarter of 2022
In 2021, affected by the epidemic and the macro-control of education and real estate industry, from the revenue side, the company’s revenue from cloud computing related customers decreased, and the expected loss accrued increased due to the delay of business payment process of some customers that have been put on the shelves in IDC business. Among them, IDC and its value-added business reached 1.84 billion yuan, with a year-on-year increase of 10.2% and a gross profit margin of 53.6%, down 1.2pct from the same period last year; Cloud computing and related services amounted to 560 million yuan, with a year-on-year increase of 0.9% and a gross profit margin of 9.6%, down 1.2pct from the same period last year.
According to the 2021 annual report, at present, the company’s IDC Internet data center business has developed steadily, focusing on the national business layout of Beijing Tianjin Hebei, Yangtze River Delta and central and Western China starting from Changsha. At present, the scale of operation and reserve projects has exceeded 100000 cabinets, 43000 cabinets have been put into operation (up to 45000 in Q1 2022), and the user shelf rate has exceeded 70%. Of which:
In Beijing Tianjin Hebei region, Fangshan phase I has been put into use during the reporting period, with a shelf listing rate of nearly 80%. Fangshan phase II has reached a cooperation agreement with some users, and it is expected to be delivered in 2022q2. In addition, some cabinets have been delivered in Yanjiao phase III and phase IV; Tianjin Baodi project started in January 2021. 5000 5kW cabinets are planned to be built in phase I, and the main construction of two buildings is expected to be completed in 2022.
In the Yangtze River Delta, the first phase of Jiading project has been put into use, the second phase has been put into operation gradually since 2021q4, and some cabinets have been delivered and put on shelves successively; In addition, the company launched the Hangzhou digital economy science and Innovation Center Project in April 2021. It is planned to start in 2022 and plan to build 100006kW cabinets.
In central and Western China, Changsha, as an important hub node of the company’s layout in Central China, started construction in December 2021, planned 16000 cabinets, and signed a cooperation agreement with China Telecom Corporation Limited(601728) Hunan branch to jointly promote; In addition, the company cooperated with China Telecom Corporation Limited(601728) to build a data center project in Urumqi, Xinjiang, to further develop the western region.
The project progress of 2022q1 company in Shanghai, Tianjin, Yanjiao and Changsha are affected by the epidemic control policies to varying degrees. At present, Shanghai Jiading project is still in the state of comprehensive sealing and control, the phase II project is in the state of shutdown, and the resumption time is still uncertain. The subsequent delivery and shelf progress of the project will be affected. In the first quarter of 2022, the company actively adjusted its business strategy. By the end of the reporting period, the company had achieved an operating revenue of 1.83 billion yuan, a year-on-year decrease of 6.49% over the first quarter of last year and a month on month increase of 3.80% over the fourth quarter of 2021; The net profit attributable to the parent company was 190 million yuan, a year-on-year decrease of 13.63% over the first quarter of last year and a month on month increase of 27.04% over the fourth quarter of 2021.
From the perspective of the composition of main business, the proportion of IDC business income has been increasing, and the total proportion of IDC operation management and value-added service business in operating income has reached 26.36%, about 2 percentage points higher than that in 2020. The gross profit margin of IDC business remained stable at more than 50%.
The green data center project was promoted in an orderly manner, and pue control achieved remarkable results
The company’s data center business is advancing steadily, and the policy support promotes the development of green data center. In the new and reconstructed data center projects, the company explores technical solutions in many aspects such as precision air conditioning, energy-saving equipment and power use, and complies with the national energy consumption regulation policy. The company actively explores and tests the effect of indirect evaporative cooling and liquid cooling technology to reduce pue. According to the experimental calculation, the application of indirect evaporative cooling technology is expected to reduce the annual pue value by more than 0.05 and the carbon dioxide emission by about 4000 tons under the scale of a 15 MW standard machine room building; The application of liquid cooling technology can reduce the annual pue value by about 0.15 and the carbon dioxide emission by about 12000 tons under the scale of a 15 MW standard machine room building. By the first quarter of 2022, the company has completed the transformation of the first phase, and the refrigeration efficiency has been improved by about 20%.
High R & D investment laid the foundation for development, and the cost of conversion to fixed assets peaked and fell
From the cost side, the overall cost of the company remained stable, and the rate of management and R & D expenses increased slightly. The management and R & D rates in 2021 annual report and 2022q1 were 2.72% / 3.39% and 3.07% / 3.28% respectively. In 2021, the company’s new data center was put into operation for fixed assets conversion, resulting in the increase of fixed costs such as depreciation and amortization, the increase of period expenses, and the high increase of R & D expenses, which reduced the company’s net profit level as a whole. It is expected that with the use of new cabinets on the shelves, the amortization cost will be further reduced and part of the profit space will be released.
With the promotion of “counting from the east to the west”, the long-term strategic layout has been gradually improved, and the growth is still stable
As an old third-party data center service provider with multi-point layout in Beijing Tianjin Hebei, Yangtze River Delta, central and Western China, the company has strong data center construction and operation ability. Through the strategic layout of strengthening self built resources in core areas and joint construction of operators in western areas, the company is expected to continue to make profits in the promotion process of “counting East and counting West”.
At the same time, the company’s monetary capital has been continuously strengthened. During the reporting period, the fixed increase has been implemented, and the financial strength has continued to increase. We believe that in the data center industry reform cycle, the company has sufficient funds and is expected to integrate into the subject assets with appropriate prices in the primary market through various modes such as collection and M & A, and still has long-term competitive strength.
Investment advice
Considering the impact of the epidemic situation on the construction and launch progress of the data center, as well as the impact of the epidemic situation and policy control on the cloud computing business, the profit forecast is lowered. It is estimated that the revenue in 22-24 years will be adjusted from 9.200/10.398/n/a billion yuan to 8.220/88.69/9.636 billion yuan respectively, and the EPS in 22-24 years will be adjusted from 0.73/0.86/n/a yuan to 0.51/0.57/0.64 yuan respectively, corresponding to the closing price of 10.46 yuan / share on April 23, 2022, and the PE will be 20.7/18.4/16.2 times respectively, Maintain the “overweight” rating.
Risk tips
REITs related policy risks; The supervision of IDC industry is becoming stricter, and the competition intensifies the risk; The risk that IDC cabinet volume and shelves are less than expected; Goodwill impairment risk; Systemic risk.
