Main points of investment:
Maintain the "overweight" rating and maintain the target price of 17 yuan. KuaiBao, the company's announced performance, achieved revenue of 1.31 billion yuan (+ 2.24%) and net profit of 74 million yuan (- 31.9%) in 2016, lower than market expectations, mainly due to fierce competition in the mobile communications market, resulting in a decline in the company's gross profit margin. We believe that the mobile communications market is expected to maintain steady growth in 2017, and the interconnected harbor will thicken the company's performance. Considering the connected harbor merger table, it is estimated that the EPS from 2017 to 2018 will be 0.29 yuan (+ 4%) / 0.35 yuan respectively, maintaining the target price of 17 yuan and maintaining the "overweight" rating.
DCI network service capability is the core competitiveness of hybrid cloud service providers. Hybrid cloud promotes the rapid outbreak of IDC mutual visit traffic. From 2014 to 2019, the growth rate of IDC mutual visit traffic is the fastest, with a compound growth rate of 31%. It is a new growth engine of network traffic in the future. With the rapid development of hybrid cloud, the problems of traditional IP network architecture, such as low bandwidth efficiency, poor performance and long service deployment cycle, have become increasingly prominent. DCI network can provide IDC direct connection service for hybrid cloud, which is the core network service capability.
The company acquires the interconnected harbor, arranges DCI services ahead of time, and has the core competitiveness of hybrid cloud services. Interconnected Harbor IDC+SDN service effectively solves the business needs of customers to deploy global coverage. At present, it has independent BGP network in Beijing, Shanghai and Guangzhou, and MPLS backbone network in the country. The company has the ability to provide interconnection for multiple IDC, so that the company can have a strong advantage to enter the hybrid cloud services market.
Catalyst: rapid expansion of interconnected harbor hybrid cloud services.
Risk hint: competition in the traditional business market intensifies, and the performance of M & A targets falls short of expectations.
