Event: according to the official Wechat "Minhang Today" report of the Information Office of Minhang District, Beijing Guoxin Zhongji Investment Management Co., Ltd. (hereinafter referred to as "Guoxin Zhong") recently signed a strategic cooperation agreement with the people's Government of Minhang District. It will jointly launch the data center industry investment fund project with Shagang Group, China's largest private steel company, and formally reach industrial cooperation with the Minhang District Government of Shanghai. Promote the development of industrial integration.
It is understood that the big data industrial capital platform to be established by Guoxin Zhongshi and Shagang Group involves a total of 35 billion yuan of investment: (1) Shanghai Shagang Guoxin big data Mother Fund (Phase I) to be established jointly by Guoxin Zhongshi and Shagang Group; (2) Shanghai Jinhuan Fund Investment Management Company, a platform company to be set up by Shagang Group, 30 billion yuan.
In addition, Shagang Group will also be established in Chinese mainland's big data operating platform Jinhuan Technology. After its establishment, Jinhuan Technology will obtain the "Internet data Center Business" license issued by the Ministry of Industry and Information Technology to provide operating services for Shagang Group and other third parties' big data project in Chinese mainland.
The cooperative state-owned assets platform strengthens the domestic IDC, becoming the only IDC giant in the world to realize the coordinated layout at home and abroad, and the scarcity is further highlighted. According to Tianyanchan data, Beijing Guoxin Xinchuang (100% controlled by the State Information Center) and Huarong Capital are Guoxin shareholders, each holding 40%. The cooperation between Shagang Group and the state-owned investment platform under the State Information Center shows that the asset quality and technical strength of Shagang and Global Switch have been recognized to a certain extent.
With the help of the state-owned investment platform and government support, the company is expected to quickly improve the domestic IDC layout and form coordination with the overseas nodes of GS, so as to create the only IDC company in the world that has layout and global operation both inside and outside China. Because domestic IDC has license restrictions and strict examination and approval; on the other hand, the uncertainty of the global environment makes it more difficult to acquire large overseas IDC factories, so the scarcity of Shagang + GS will continue to be highlighted.
Strength has been recognized by state-owned assets, take advantage of the "Belt and Road Initiative" east wind, to create a data sea security platform. Chinese enterprises have a large number of data storage and computing requirements in the process of going out to sea, and GS happens to have a layout in the relevant countries of "Belt and Road Initiative", which can provide safe data services for Chinese customers to go to sea. On the other hand, if some of the existing Western customers of GS are willing to expand the Chinese market, if the domestic IDC layout of Shagang / GS can meet their needs, Shagang may become its preferred choice. It can satisfy the domestic enterprises to "go out".
The demand can also meet the "coming in" needs of overseas enterprises.
Investment suggestion: we forecast that the EBITDA of GS in 2020-2021 will be 33.33 billion pounds respectively. Taking into account the magnificent demeanor of the IDC industry and the scarcity of GS assets, we maintain the "buy" rating, with a target price of 16 yuan, corresponding to the 2020 EV/EBITDA 45x.
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.
