Recently, the market has paid more attention to Shagang. When the fixed increase plan was released in November 2018, the 2018 annual report of M & An assets GlobalSwitch (hereinafter referred to as GS) had not yet been released, and the operating data in the announcement was long ago. Because GS's 2019 annual report has not been disclosed, in order to analyze the company's operation in more detail, we first start from its 2018 report, combined with market concerns, from five issues, in-depth analysis.
(1) the operation of GS?
In 2018, revenue reached 400 million pounds, an increase of 5.6 percent over the same period last year, with an increase of 270 million pounds, and an increase of 2.6 percent over the same period last year.
(2) GS's project reserve?
At the end of 2018, the company launched the construction of the second data center in Singapore, which is the company's 12th data center. After completion, the total power capacity reaches 384MW, which is about 77,000 cabinets according to 5KW standard cabinets. Combined with the fixed growth plan for 2018, the reserve of GS's existing projects will also add about 40 per cent of its power capacity.
(3) the business development of each region of GS?
The growth in the Asia-Pacific region is strong, and the business in Europe is expected to gradually return to growth. 1) in terms of income structure, the share of Asia-Pacific region is increasing rapidly: 54% (- 6 pct) in Europe, 44% (+ 7 pct) in Asia-Pacific and 2% (- 1 pct) in other regions in 2018.
2) in terms of regional growth, the Asia-Pacific region is growing strongly, and the European region is expected to gradually return to growth: revenue in the Asia-Pacific region increased by 25% year-on-year in 2018. EBITDA increased by 28% year-on-year. In 2018, European revenue fell 5% year-on-year and EBITDA fell 8% year-on-year. We expect that it may be due to the risk of loss of foreign customers caused by the adjustment of the equity structure in recent years. As equity settles, the risk is expected to ease marginally.
3) in the future, the company will continue to focus on Europe and Asia-Pacific, and enjoy the rapid growth dividends of emerging markets: global data center revenue is expected to grow at a compound annual rate of 9.3% from 2017 to 2022, including 6.7% in North America, 8.8% in Europe, the Middle East and Africa, and 11.6% in the Asia-Pacific region.
(4) what is the operating efficiency of GS?
Operational efficiency is significantly higher than that of its peers: by the end of 2018, the company had 218 employees, basically the same as in previous years. Among them, there are 122 property managers, 14 salespeople and 82 managers, with high operational efficiency, with an average income of about 1.83 million pounds and a per capita salary of about 73000 pounds.
(5) what is the future growth of GS?
With the acceleration of overseas expansion, the catalysis of the epidemic is expected. Previously, due to equity delivery, GS expansion was slow, and the market underestimated the growth of GS. We believe that after the equity is settled, it is expected to return to more than 10% growth in the next two years. Considering the demand for cloud computing accelerated by overseas outbreaks, GS may expand more than expected.
After the completion of the acquisition, GS has the following unique advantages: 1) docking the overseas data requirements of Chinese enterprises: judging from the disclosure of GS annual report, in addition to its traditional business layout, GS and China Telecom Corporation (global) cooperate more and more closely to provide services for telecom terminal customers and carry out project planning as needed. In addition, relying on overseas core IDC resources, GS will also become a data service platform for "Belt and Road Initiative" domestic enterprises to go out.
2) to meet the "walking in" needs of overseas customers: actively promote the layout of the Chinese market, and it is expected that the data center will be located in the Shanghai Waigaoqiao Free Trade Zone, providing a cost-effective solution for overseas customers to enter China.
Risk tips: slow progress of acquisition, GS revenue is not up to expectations, the main steel industry profits decline, fixed increase the uncertainty of the plan.
