\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 83 Beijing Sinnet Technology Co.Ltd(300383) )
[key points of investment]
The company released the 2021 annual report and the first quarterly report of 2022. Last year, the operating revenue was about 7.7 billion yuan, a year-on-year increase of 2.99%, the net profit attributable to the parent was 836 million yuan, a year-on-year decrease of 8.41%, and the net profit deducted from non attributable to the parent was 858 million yuan, a year-on-year decrease of 5%, lower than the previous expectation. In the first quarter of this year, the company achieved a revenue of 1.833 billion yuan, a year-on-year decrease of 6.49%, a net profit attributable to the parent of 193 million yuan, a year-on-year decrease of 13.63%, and a deduction of non attributable net profit of 193 million yuan, a year-on-year decrease of 13.84%.
IDC business grew steadily, and SaaS business was greatly impacted. In terms of business, the company’s IDC business developed steadily in 2021, and the number of cabinets put into operation in core areas continued to increase. By the end of 2021, the company had put into operation more than 43000 cabinets, with an on shelf rate of more than 70%, driving the company’s IDC related business revenue to reach 2.029 billion yuan, a year-on-year increase of 9.82%. The revenue of cloud computing business was 5.591 billion yuan, with a year-on-year increase of 0.85%. Among them, the operation of AWS business operated by the company is stable. With the expansion of the company’s infrastructure layout, this business also has greater development space and possibility; The SaaS service business of the subsidiary unparalleled technology was impacted by the “double reduction” and the impact of the epidemic on education, tourism, life services and other industries, and the revenue and profit decreased to varying degrees compared with the previous year. In 2022, covid-19 epidemic relapsed in many places in the first quarter. The construction and production progress of IDC projects in Shanghai, Tianjin, Yanjiao and Changsha were affected by epidemic control policies to varying degrees. The launch progress and project delivery time of some projects were delayed, resulting in a year-on-year decline of 6.49% in the company’s revenue.
The gross profit margin fluctuated slightly, and IDC business maintained a high level. The company’s comprehensive gross profit margin in 2021 was 20.42%, a year-on-year decrease of 0.46pct and remained stable. In terms of business, the gross profit margin of IDC and its value-added services was 53.62%, down 1.23pct year-on-year. We think it is affected by the market competition and electricity price fluctuation in relevant regions. The gross profit margin of cloud computing and related services of the company was 9.59%, down 1.22pct year-on-year. We think it is affected by the “double reduction” and the disturbance of the epidemic on the business of downstream customers of the company.
There are many disturbing factors to the profit, which has been improved in 2022q1. In 2021, the company’s net profit attributable to the parent decreased by 8.41% year-on-year, which was mainly affected by the following factors: 1) the new IDC was put into operation and converted into fixed assets, resulting in an increase in fixed costs such as depreciation and amortization; 2) The company continued to explore in the fields of IDC technology innovation and energy-saving optimization, and increased R & D investment in cloud computing business; 3) Affected by covid-19 epidemic, double reduction in education industry and real estate regulation policies, the revenue of cloud computing customers in related industries of the company decreased; 4) In terms of IDC business, due to the delay of the commercial payment process of customers that have been put on the shelves, the accrued expected loss increases. In the first quarter of this year, with the improvement of the company’s cloud computing business, the increase of the listing rate of new IDC and the further dilution of fixed costs such as depreciation and amortization, the company’s net profit attributable to the parent increased by 27.04% month on month, showing a significant improvement trend.
IDC resources in core areas have further increased, and there are abundant projects under construction and reserves. In 2021, the company launched Tianjin Baodi cloud computing base phase I project and Hangzhou digital economy science and Innovation Center project to further increase the resource reserve of core regional data centers in the front line and surrounding areas. The company’s data center business has formed a national business layout with Beijing as the center and Beijing Tianjin Hebei, Shanghai as the center and the Yangtze River Delta, and Changsha as the starting point to promote the business development in central and Western China. At present, there are 12 data centers that can provide services, and more than 43000 cabinets have been put into operation in Beijing Tianjin Hebei and the Yangtze River Delta. The company expects that after the completion of the projects under construction and reserve, it will have an operation scale of more than 100000 cabinets nationwide, laying a foundation for the sustainable growth of IDC business. [investment suggestions]
Considering the impact of the epidemic and the “double carbon” policy on the company, compared with the previous forecast, we lowered the forecast of the company’s operating revenue and gross profit margin from 2022 to 2023, and added the performance forecast for 2024. It is estimated that the company’s operating revenue from 2022 to 2024 will be 8.339 billion yuan, 9.131 billion yuan and 10.117 billion yuan, the net profit attributable to the parent company will be 931 million yuan, 1.030 billion yuan and 1.138 billion yuan, and the EPS will be 52 yuan, 57 yuan and 63 yuan, The corresponding PE is 21 times, 19 times and 17 times. We are cautiously optimistic about the future performance of the company and maintain the “overweight” rating.
[risk tips]
The progress of new IDC project is not as expected;
The shelf rate of the company’s cabinet is lower than expected;
Market competition intensifies.
