Events:
Recently, we conducted an on-the-spot survey of Zhejiang University Wangxin (600797) and communicated with the company's business situation.
Comments:
The new term of the board of directors and supervisors was unanimously approved. The company's shareholders elected Shi lie, Chen Jian, Shen Yue, Dong Danqing, Zhao Jian, Zhang Sigang and Pan Lichun as company directors, Fei Zhongxin, Zhan Guohua, Shen Yuanqing and Ling Yun as independent directors, and Wu Xiaonong and Yao Xiaoyan as company supervisors. The above motions were passed unanimously at the annual general meeting of shareholders in 17 years, which reflects the confidence and support of shareholders in the management of the company.
The business development of Smart City is in line with expectations. Wangxin Electric, a subsidiary of the company, is mainly involved in the construction of road stations, tunnels and pipe corridors; the application of the railway face recognition gates that have been put into use is good; Netxin Electric has completed the construction of customer service information system and related projects of Jiujing-Quzhou Railway, the project of Longan section of Delong-Yanzhou Railway, and the project of Chongqing West Railway Station and customer service information system, which has been reflected in its profits for 17 years. In addition, the company is also involved in the construction of urban brain in Xiaoshan District. In terms of seasonal factors, the Smart City business recognized more revenue in the second half of the year, so it is expected to have a better performance in the second half of 18 years.
Smart life business is developing rapidly. With the development of universal insurance and medical treatment in other places, the health insurance business has maintained a stable development, and the profitability of Xinenpu is also high. the company's intelligent life business income is 233 million yuan, and the gross profit margin is 70.11%. At present, the main companies engaged in health insurance payment business are Neusoft, Wanda, Yinhai, Yi Lianzhong and other companies. It is expected that with the release of demand for health insurance upgrading and the launch of new business, the company's smart life business will still maintain a stable profit level.
The block chain enterprises in which the company participates are developing well. The company's shareholding interest chain technology focuses on the underlying structure of the block chain, and has done a good job in obtaining patents: in the past 17 years, interest chain has won 16 blockchain patents, ranking 11th in the world, second only to BABA in Hangzhou; interest chain Technology has cooperated with China UnionPay, ICBC, Agricultural Bank Of China, Zhejiang Commercial Bank and other financial institutions. At present, blockchain can have practical application in the field of credit authentication; the company's large financial sector also serves financial institutions, and has a certain degree of coordination with interest chain technology in business. It is expected that the technological advantages of interest chain technology will gradually fall to the ground and be transformed into revenue and profits, thus contributing to the company's revenue.
Huatong Cloud is expected to come out of the downturn. At present, Huatong has five data centers with 60,000 square meters and 10,000 cabinets in Hangzhou and Shanghai. Among them, Qiandao Lake Cloud data Center uses water cooling technology to create a domestic advanced energy-saving data center. In the field of cloud computing services, the company is a proprietary cloud service provider for Zhejiang Provincial Government, Hangzhou Municipal Government and Lishui Municipal Government, providing government cloud deployment for 219 projects of 62 municipal government units and 52 provincial government units in Hangzhou. Affected by the reduction of radio and television fees and speed up, Huatong Cloud's performance is not as good as expected. Research and development expenditure has increased as a result of the development of artificial intelligence basic cloud service platform. Less than halfway through 18 years, Huatongyun still has enough time to take measures to reduce the impact of radio and television fee reduction and speed up, and it is expected that the performance commitment will be fulfilled throughout the year.
Chengdu project has obvious energy advantages. When the company laid out in Sichuan, at a time when iron and steel enterprises went to backward production capacity, so they got a good opportunity for cooperation. The land vacated after shutting down the iron and steel business has the index of electricity consumption, and the electricity price is low, which is more suitable to be IDC; because electricity accounts for a large part of the cost of IDC business, and low electricity price will enhance the market competitiveness of the project company. Up to now, the government of Qingbaijiang District of Chengdu has clearly defined the preferential policies enjoyed by the joint venture company, and the joint venture company is still in the process of establishment; the construction of the project has been started in February, and the planning plan and initial establishment have been completed. it is yet to be formally approved by the Qingbaijiang District Planning Bureau; if the project is approved as scheduled, the construction of the computer room is expected to be completed by the end of the year. In addition, the cooperation between Panzhihua Iron and Steel Co., Ltd. and BABA, if landed, will also be conducive to the business development after the completion of the Chengdu project. The Chengdu project is expected to generate revenue in 19 years.
Distributed AI is still in its infancy. Compared with GPU centralized processing, the cost advantage of distributed AI technology is obvious. The company's distributed AI can be achieved at the technical level and is currently being tried out in small areas and small environments. The company will start from distributed cloud services, take distributed AI as the focus, integrate its cloud computing, smart city, big transportation, big finance, big health and other business sectors, work together to create products with core competitiveness, and make every effort to promote the strategic landing; to sum up, the company's main business is expected to have rapid growth.
Deal with the equity situation of Zhonghe Technology. The company chooses a machine to reduce its holdings according to its own cash demand. At present, the company has plenty of cash, financial expenses have declined, and there has been no demand since 18 years. It is expected that the reduction demand in 18 years will be lower than that in 17 years.
Profit forecast and investment suggestion: the EPS of the forecast company after full dilution in 2018-19 is 0.39 yuan and 0.52 yuan respectively, according to the closing price of 11.55 yuan on May 29, the corresponding PE is 29.8 times and 22.2 times respectively. Considering that the valuation of the company is relatively low relative to the computer application industry, and the AI technology project in the annual key R & D plan of the Science and Technology Department of the winning province, the investment rating of "buy" is maintained.
Risk hint: after the delay of project acceptance, Huatong Cloud's performance continued to be lower than expected for 18 years, and systemic risk