Main points of investment
The company released the 2018 semi-annual report: in the first half of the year, the company achieved operating income of 1.52 billion yuan, an increase of 20.0% over the same period last year; the net profit of shareholders belonging to the parent company was 92.8 million yuan, down 45.0% from the same period last year; and the net profit after deducting non-return was 90.14 million yuan, up 734.8% from the same period last year.
The gross profit margin has increased significantly, and the profitability has improved. In the first half of 2018, the company's revenue increased by 20% compared with the same period last year, and the overall profitability improved. The gross profit margin was 29.2%, a year-on-year increase of 5.9%. The reason for the sharp increase in gross profit margin was mainly due to the company's optimization of business structure. On the one hand, the company further divested the traditional integration and outsourcing business with low gross profit margin; on the other hand, in August 2017, the company completed the remaining 80% equity acquisition of Huatong Cloud data, and the gross profit margin of Huatong Cloud data cloud services is much higher than the company's overall gross profit margin.
The decline in performance is due to higher gains from the disposal of long-term equity in the same period last year. The company's parent net profit fell 45% in 2018 compared with the same period last year, mainly due to more gains from the disposal of long-term equity investments in the first half of last year. From March to May 2017, the company sold a total of 12.44 million Zhonghe technology shares through the Shenzhen Stock Exchange block trading platform. After deducting the impact of investment income, the company's non-net profit in 2017 and the first half of 2018 was 10.8 million yuan and 90.14 million yuan respectively.
The layout of the national data center business is progressing smoothly in the southwest region. The company is based in Zhejiang, the layout of the national data center business, the company invests in the construction of southwest cloud computing intelligent industry base project, the current project implementation subsidiary Chengdu Netxin has been established, and completed the initial investment of 13 million yuan. The Southwest Cloud Computing Intelligent Industry Base project has a planned land area of about 150mu and a total construction area of about 100000 square meters. when completed, it can provide about 10, 000 4.5KW cabinets and accommodate 160000 servers.
Profit forecast and investment advice: we give the company an EPS of 0.37 yuan, 0.43 yuan and 0.47 yuan respectively from 2018 to 2020, maintaining a "prudent overweight" rating.
Risk hint: data center construction process is not as expected, goodwill impairment risk, cloud computing industry competition intensifies
