Event: the company reported in 2020 that its operating income was 961 million yuan, an increase of 36.11% over the same period last year; the net profit belonging to the parent company was 131 million yuan, 28.27% over the same period last year; and 128 million yuan was deducted from non-net profit, an increase of 44.83% over the same period last year.

Comments:

First, revenue and net profit maintained rapid growth, IDC business grew at a high speed, mask machine brought new contributions, revenue and net profit increased rapidly in the first half of the year, mainly due to the substantial increase in operating income of special equipment and IDC business. Revenue from other equipment business increased by 281.22% compared with the same period last year, mainly due to the addition of mask machine products in this period, with a new business income of 136 million yuan. IDC business revenue reached 440 million yuan, accounting for 45.98% of the total revenue, an increase of 54.41% over the same period last year, becoming the company's core business. The only network has seen a significant increase in bandwidth, cabinet sales, and the number of nodes in the layout.

The gross profit margin increased slightly and the R & D cost increased significantly. The company's gross profit margin in the first half of the year was 27.67%, up 0.35 percentage points from the same period last year. Among them, the gross profit margin of IDC and special equipment was 22.83% and 31.79% respectively, down 4.64% and up 4.57% respectively from the same period last year. The increase in gross profit margin of special equipment is mainly due to the newly increased gross profit mask machine business, which promotes the gross profit margin of other equipment business to 47.88%, an increase of 20.78 percentage points over the same period last year. The sales expense rate, management expense rate and financial expense rate were 1.43%, 4.48% and 0.27% respectively, down 1.16%, 0.45% and 0.07% respectively from the same period last year, while the R & D expense rate reached 5%, an increase of 1.13% over the same period last year.

Second, self-construction and cooperation to speed up the layout of IDC throughout the country

In April 2018, the company successfully acquired a 100% stake in Guangdong's only network. The only network is a well-known comprehensive cloud service solution provider in China, and its main business scope is IDC, network security, cloud direct connect, public cloud, hybrid cloud and other services. By June 2020, the only data center node whose network has been established and operated has covered 36 prefectures and cities in 18 provinces and some overseas areas, and continues to plan and improve the layout of data center nodes.

At present, the only network from the organic room is the "only enjoy (South China) data center", with a capacity of 3308 standard cabinets, which is being gradually delivered.

The company recently announced a plan to invest in Nanxing Shatin green industrial cloud data industrial base, industrial Internet and data center R & D projects and supplementary liquidity. Among them, Nanxing Shatian Green Industrial Cloud data Industry Base, located in Dongguan, plans to invest 587 million yuan to build 5000 4KW standard cabinets, which will further expand the company's IDC scale after it is put into production.

In the future, the company will focus on the three core areas of Beijing, Shanghai and Shenzhen to speed up the layout of self-built and self-operated data centers. At the same time, around the key areas of the ring road around Beijing, Shanghai and Shenzhen, we adopt a variety of open cooperation models, including cooperation and co-construction, one-stop operation, and so on, to quickly form a national layout.

III. Special equipment: intelligent upgrade + import substitution

The company is the leading manufacturer of panel furniture production equipment in China, and its main products are CNC series machining centers, computer cutting board saws, automatic edge sealing machines, CNC drilling, complete sets of automation and other related series of equipment. Future intelligent upgrading and import substitution is the development strategy. 1. According to the substitute demand of industrial upgrading, the company accelerates the introduction of intelligent products to help furniture enterprises replace manpower and improve efficiency. 2. Strengthen R & D and manufacturing capacity and speed up the replacement of imported equipment. Get good results in the procurement of head enterprises.

Fourth, profit forecast and valuation

Nanxing Shatian data center project is still in the fixed growth stage, and gradually built and put on the shelves after the fixed increase funds are in place, adjusting the company's 2020-2021 net profit forecast from 2.75 and 421 million yuan to 2.75 and 346 million yuan, with an estimated net profit of 432 million yuan in 2022, corresponding to 23, 18 and 14 times of PE in 2020-2022, respectively, maintaining the buying rating.

Risk tips: furniture industry demand decline; raw materials / labor prices lead to reduced corporate profitability; IDC expansion is not as expected.