Summary of events: the company recently issued a 2021H1 report, realizing revenue of 1.499 billion (YOY+24.8%), net profit of 164 million (YOY+5.6%), and non-return net profit of 127 million (YOY-7.8%).
Comments:
Revenue grew steadily and cash flow stood out. 2021H1's revenue was 1.499 billion, a year-on-year growth rate of nearly 25%, while it was 4.4% higher than 2019H1's 1.374 billion CAGR. It still achieved steady growth on the premise of a high base, of which the data operation and service business with a gross profit margin of 53.7% achieved 92 million revenue. Sales expenses / management expenses / R & D expenses increased by 32% / 2% / 96% respectively, which shows that we continue to maintain reasonable investment in R & D and market development, such as 606 cases of self-research and ecological algorithm products. In the past few years, the company's data Lake project construction is biased towards asset investment, and the payback cycle has been extended. The operating cash flow of 21H1 is-113 million, a significant improvement of 61% compared with the same period-288 million.
The development of the data Lake is in line with the background of the carbon peak carbon neutralization policy. At present, the company has built 34 data lake projects throughout the country, covering 20 provinces, municipalities and autonomous regions, and the stock scale has seen a good coverage effect. The construction of the data lake is in line with the current carbon peak carbon neutralization background, and the electromagnetic-optical hybrid storage system can store cold data by blue light, temperature data and hot data by magnetoelectricity, and can greatly reduce the carbon emissions of data storage. For example, compared with all hard disk media, 1PB data can save 20498 kilowatt-hours of electricity annually, save 94.74% of electricity, and save 12.38 tons of carbon per year.
The data lake has moved from project construction to data value mining and operation services. Thirteen data lake projects have obtained data storage agreements, and seven project companies have obtained data operation license agreements for 13 industries, such as public security, transportation, medical care, culture, tourism, industry, and so on. 100 subdivided application scenarios, 50 data models and 20 industry solutions have been initially formed, and the data capitalization service capabilities of various industries have been continuously optimized. It indicates that the data Lake project is evolving from incremental construction to a new stage of stock data value mining and operation services.
Profit forecast and investment rating: we believe that the data operation services business with high gross margin will accelerate the release of net profit, so we will increase the company's net profit in 2021-2023 to RMB 5.17x649x864 million, corresponding to EPS of RMB 0.80pm 1.33 respectively. The current stock price corresponds to the 2021-2023 PE value of 42-34-25.
As an important subsidiary of Hualu Group, the company is expected to lead the data security market. According to the 2022 homing net profit of 650 million, given 45-55 times PE, the medium-term valuation can reach 293-35.8 billion, upgraded to "highly recommended".
Risk Tip: data operation services are not as expected, and data security policies are not as good as expected.