\u3000\u3000 Inspur Electronic Information Industry Co.Ltd(000977) (000977)
The server leader is expected to enter the demand inflection point and give a “buy” rating for the first time
The demand of China’s Internet industry is expected to be marginal, the tension in the upstream supply chain is gradually alleviated, and China’s servers are expected to enter a new business cycle. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 2.068 billion, RMB 2.543 billion and RMB 3.088 billion respectively, and the EPS will be RMB 1.42, 1.75 and 2.12/share. At present, the corresponding PE of the stock price is 25.6, 20.8 and 17.1 times, which is lower than the valuation of comparable companies. We will give a “buy” rating for the first time.
The demand for “computing power” in digital construction is growing rapidly, which promotes the rapid development of server market
We believe that the core driving force behind the development of the server market is the rapid growth of the demand for computing power in digital construction. According to IDC data, the total scale of global computing power will reach 429 eflops in 2020, with a growth rate of 39%. It is expected that the scale of global computing power will increase by more than 50% in the next five years, and the overall scale will reach 3300 eflops by 2025. This is mainly due to the growth of basic computing power driven by the rapid growth of cloud infrastructure service expenditure and the growth of intelligent computing power driven by AI training and reasoning needs.
The upstream and downstream multi angle verification shows that the server market is expected to enter a new growth cycle
On the one hand, the year-on-year growth rate of capital expenditure of overseas Amazon, Microsoft and Google cloud computing leaders has been maintained at more than 30% for seven consecutive quarters, with strong demand in the global server industry; On the other hand, the monthly revenue of Xinhua technology, a leading upstream BMC chip manufacturer, has recovered rapidly, while the revenue growth of Intel data center group is also gradually recovering. The growth inflection point of upstream enterprises is upward to verify that the server market is expected to enter a new growth cycle. In addition, intelsapphirerapids and amdgenoa dual platforms are planned to be introduced into the market in 2022, which is expected to stimulate the replacement of enterprise client servers and the infrastructure construction of data centers.
To achieve a good market position, the long-term large-scale advantage is expected to be strengthened
Reviewing the development history of the company, we believe that the company has grasped the two most important demand points of computing power. First, the company has grasped the wave of cloud computing, launched cloud servers earlier, and innovatively launched JDM mode to achieve win-win cooperation with cloud computing giants; Second, it has led the era of artificial intelligence and formed the most complete artificial intelligence computing full stack solution in the industry. Thanks to this, the company’s market share has been continuously improved and has become a well deserved server leader in China. In the long run, the company is expected to continue to strengthen its leading position and realize large-scale and effective development.
Risk tips: macroeconomic fluctuation risk, technology upgrading risk and internal governance risk.
