Event
The company announced on April 7, 2020 that it intends to use no more than 14.79 yuan per share to buy back 0.5% of the total share capital, and the total amount does not exceed 326 million yuan to implement the equity incentive plan.
The buyback shows the determination of transformation, and the "Belt and Road Initiative" policy promotes the coordination of data center business at home and abroad: after the reorganization, the steel assets are expected to be divested, and the competition between the company and Northeast Special Steel will be solved within five years after the reorganization. According to the company's public performance presentation meeting on April 2, 2020, after the completion of the reorganization, the company will refine and strengthen the main steel industry, at the same time, take advantage of the development trend of the "digital economy" and the policy opportunity of "Belt and Road Initiative" to steadily expand the European market, at the same time, focus on the layout of the Asia-Pacific data center market, and are currently promoting the construction and renovation of data center business in Hong Kong and Frankfurt to realize the development of data center business systems at home and abroad. The repurchase price limit is higher than the 12.16 yuan increase set in the 2018 plan, which once again demonstrates the company's determination to transform.
Europe and Asia-Pacific region high-quality geographic location core resources, good network connectivity, with network interconnection foundation: Global Switch 13 data centers are located in the core of international first-tier cities, can meet the high-end needs of customers, while the cities or regions are in important network nodes, directly connected to international and intercontinental submarine optical cables, with ultra-high network connectivity and very low latency, with a good data center interconnection business foundation. It is beneficial for Chinese enterprises to go out to sea. In addition, through personalized high-level service, maintaining high customer stickiness can steadily expand the European market.
Investment suggestion
Taking into account the company's additional issuance plan, the company's 2020-2022 exam revenue is adjusted to 20.15 billion yuan, 24.38 billion yuan, 29.14 billion yuan, and the test return net profit is adjusted to 2 billion yuan, 2.91 billion yuan, 3.56 billion yuan, corresponding to the current price PE is 23-16-13 times, maintaining the "overweight" rating.
Risk hint
The trade dispute between China and the United States reduces the risk of overseas renewal rate; the expansion of domestic business is not as expected, which makes it difficult to make up for the burden of mergers and acquisitions and affect the operation; the approval opinions of the CSRC affect the process of corporate merger; exchange rate volatility affects revenue risk; systemic risk.
