I. Overview of events
On October 26, 2021, the company released the third quarter report of 2021, saying that in the first three quarters of 2021, the company achieved revenue of 924 million yuan, an increase of 55.94 percent over the same period last year, and a net profit of 123 million yuan, an increase of 3.07 percent over the same period last year.
II. Analysis and judgment
Performance: Q3 revenue and profit increased year-on-year, gross profit margin improved significantly (1) on the revenue side: 21Q3 achieved revenue of 336 million yuan in a single quarter, + 55.08% year-on-year, and + 9.09% month-on-month. In the context of rising electricity prices and stricter PUE policies, the company's IDC construction has been promoted in an orderly manner, and a number of projects have entered the delivery period, driving 21Q3 revenue to increase greatly compared with the same period last year. (2) cost side: in the first three quarters, the company's gross profit margin reached 30.70%, an increase of 1.99pcts21Q3 compared with the same period last year. We judge that the increase in gross profit margin is due to the increase in shelving rate. 21Q1's shelving rate exceeded 73%, an increase of 9.2pcts compared with 63.8% at the end of 2020. (3) profit side: 21Q3 achieved a net profit of 50 million yuan, + 198.62% compared with the same period last year, and + 13.64% month-on-month. The net profit of home ownership increased for two consecutive quarters compared with the previous quarter.
On the other hand, the EBITDA of 21Q1-21Q3 reached 360 million yuan, + 42.88% year-on-year, a rapid growth over the same period last year.
Fundamentals: supply-side reform + CAPEX recovery of cloud manufacturers, sufficient project reserves and strong development power (1) industry level: a. From the supply side point of view, under the background of "double carbon", the policy of double control of energy consumption continues to advance, and the industry is facing reshuffling and restructuring in the process of supply-side reform. In this context, we believe that the company will rely on excellent operation and maintenance capabilities, energy management and control capabilities and the core IDC resource endowment of Hengqiang. b. On the demand side, the CAPEX growth rate of domestic BAT continues to rise from 20Q4, with Baidu, Inc. 21Q2's CAPEX + 92.27% year-on-year and month-on-month + 66.51%, both of which are high compared with the same month. We judge that the capital expenditure of 21Q4 cloud vendors will usher in an inflection point and industry demand will pick up.
(2) at the company level: the IDC project continues to advance, a. Promote Langfang expansion project (about 1000), Langfang new project (25000 cabinets), Guangzhou Nansha data center project (more than 10000 cabinets); b. The acquisition of Tianjin Pangu Yuntai and plans to build a data center with no more than 12000 high-power cabinets; c. The first phase of the new IDC project in Kunming has a capacity of about 3300 cabinets. The IDC project with Jiangxi Unicom has a capacity of 2200 cabinets; e. Provide Baidu, Inc. with 2000 high-power data center cabinets, and the total revenue of project cooperation is expected to be about 1 billion yuan.
III. Investment suggestions
The company's IDC project reserve is sufficient, the operation and maintenance capacity and energy consumption control capacity are excellent, and the performance is long-term sustainable. It is estimated that the company's 21-23 year net profit will be 1.96 million RMB 265,365 million, corresponding to the PE of 40Compact 30amp 21X. The industry can compare with Sinnet, Dataport, Kehua data and Baoxin Software with an average PE of 43X in 21 years, maintaining the "recommended" rating.
Fourth, risk tips:
Competition in the industry intensifies; the progress of new projects on shelves is not as expected.