Event
The company released its annual report for 2021, with operating income of 1.205 billion yuan, an increase of 43.35% over the same period last year, and net profit of 145 million yuan, down 7.67% from the same period last year. The net profit of non-parent was 153 million yuan, an increase of 28.08% over the same period last year.
The company released its quarterly report for 2022, with operating income of 270 million yuan, down 4.05% from the same period last year, and net profit of 42 million yuan, an increase of 44.13% over the same period last year. The net profit of non-parent was 31 million yuan, down 31.09% from the same period last year.
Brief comment
1. IDC business is growing rapidly, the international business is expected to reverse the predicament, and the performance is in line with expectations.
In 2021, the company achieved operating income of 1.205 billion yuan, an increase of 43.35% over the same period last year, with a net profit of 145 million yuan, down 7.67% from the same period last year, deducting 153 million yuan of non-return net profit, an increase of 28.08% over the same period last year. The EBITDA was 465 million yuan, an increase of 33.53% over the same period last year, while the EBITDA after deducting the non-deduction was 474 million yuan, an increase of 52.17% over the same period last year. In terms of business, the revenue from IDC services was 1.032 billion yuan, up 37.54% from the same period last year, and the gross profit margin was 30.87%, up 3.11% from the same period last year. The revenue from other Internet integrated services was 136 million yuan, up 51.72% from the same period last year, and the gross profit margin was 22.12%, down 22% from the same period last year, which is expected to be caused by changes in the business income structure. The data center business delivered in 2019 and 2020 in Beijing, Langfang and other regions carried out smoothly, the shelving rate continued to increase, the revenue of IDC business increased significantly, and the company's non-profit deduction achieved rapid growth, which was in line with market expectations.
The company's operating income increased rapidly in 2021, but the return net profit decreased compared with the same period last year, mainly due to 17.91 million yuan of share payment fees generated by the stock incentive plan, and investment income of-19.45 million yuan from amethyst storage (34.98 million yuan in 2020). The new lease standard increases the cost recognized in the current period by 13.54 million yuan, as well as the company's international business affected by the COVID-19 epidemic and the surrounding geopolitical and economic situation.
In 2021, the company's gross profit margin was 29.25%, down 0.26 percentage points from the same period last year, and the net sales margin was 11.9%, down 6.91 percentage points from the same period last year. The expense rate during the period was 14.64%, an increase of 2.49 percentage points over the same period last year. Among them, the rate of sales expenses was 1.6%, down 0.06% from the same period last year; the rate of management expenses was 2.75%, an increase of 0.11% over the same period last year, mainly due to business expansion and equity incentive fees for managers; and the rate of R & D expenses was 3.38%, an increase of 0.82% over the same period last year, mainly due to increased R & D investment and equity incentive fees for R & D personnel. The financial expense rate was 6.91%, an increase of 1.61% over the same period last year, mainly due to the implementation of the new leasing standards and the expansion of financing scale.
In the first quarter of 2022, the company achieved operating income of 270 million yuan, down 4.05% from the same period last year, and its net profit was 42 million yuan, up 44.13% from the same period last year, deducting 31 million yuan from non-parent net profit, down 31.09% from the same period last year. 2022Q1's operating income and deduction non-profit have declined, which is expected to be mainly caused by the decline in international business. The company's overseas market IDC business was greatly affected by the COVID-19 epidemic and the surrounding geopolitical and economic situation in the second half of 2021. The expansion activities of the new regional market were limited, and the revenue and profit of the original business decreased significantly. The company has activated overseas resources by opening up expenditure and reducing resources, expanding new regions and new customers, and is expected to gradually reverse the plight of international business in 2022.
2. The company continues to layout IDC around the core area, and it is expected that the number of cabinets will grow rapidly in the future.
By the end of 2021, the number of self-built IDC switchboard cabinets was about 19900, an increase of 24% compared with the end of 2020. Other new data center projects include Langfang Gu'an data Center project (total planning 25000 cabinets), Guangzhou Nansha data center project (total planning 10,000 cabinets), Tianjin Wuqing data center project (total planning 12000 cabinets), Yunnan Kunming data center project (first phase planning 3300 cabinets), Jiangxi Nanchang data center project (total planning 2200 cabinets) are in steady progress. The number of new cabinets is expected to reach about 20000 in 2022. The company and Baidu, Inc. successively signed the "notice of Cooperation intention" for the new construction projects of Guangzhou Nansha and Langfang Gu'an data Center. it is estimated that the total income of project cooperation during the cooperation period is about 1 billion yuan and 950 million yuan. the above data center resources will be delivered to Baidu, Inc. in 2022. With the expansion of the company's IDC business in the core areas and the gradual increase in the power-on rate of the cabinet, the overall revenue and profits of IDC services are also expected to be released quickly, with more room for growth in the future.
3. The company actively responds to the "double carbon" policy to promote the development of data center carbon neutralization and new energy business.
After the company completed the neutralization of all the total greenhouse gas emissions of the self-built data center from the date of commissioning to the end of 2020 in July 2021, and obtained the data center carbon neutralization certificate, in April 2022, the company again obtained the carbon neutralization certificate of the company's self-built data center issued by the certification body designated by the China National Accreditation Committee for conformity Assessment (CNAS). In the future, the company will continue to implement the strategic policy. Ensure that the self-built data center can achieve the goal of carbon neutralization every year and provide customers with "zero carbon" green data center services.
In May 2021, the company invested in the establishment of a holding subsidiary, Aofei New Energy, and selected Langfang Xunyun data Center as a strategic pilot to gradually build a distributed photovoltaic power generation system and access to provide green power for the data center. By the end of 2021, Aofei New Energy has signed a total of 35 development projects in Guangdong, Guangxi, Jiangxi and other provinces, with the total installed capacity close to 100MW.
4. Investment suggestion: the company will add a considerable number of cabinets in the next two years, and the performance flexibility may be greater after the power-up rate is increased, so as to maintain the "buy" rating.
According to the company's cabinet construction plan, the company will maintain a fast momentum of putting cabinets in the core area in the next two years. We estimate that the company's operating income from 2022 to 2024 will be 1.681 billion yuan, 2.559 billion yuan and 3.558 billion yuan respectively, with year-on-year growth rates of 39.48%, 52.25% and 39.06% respectively, and net profit of 193 million yuan, 269 million yuan and 407 million yuan respectively, with year-on-year growth rates of 33.17%, 39.62% and 51.34% respectively. At present, the market capitalization corresponds to PE multiples of 32X, 23x and 15X, and EV/EBITDA multiples of 11x, 7X and 5X, respectively, maintaining a "buy" rating.
5. Risk hints: the impact of the epidemic exceeded expectations; the construction and delivery of IDC project was delayed; the progress of IDC project was not as expected; the market competition intensified.