Event: on November 24, 2020, the company announced that the company intends to buy 100% equity in Suzhou Qingfeng by issuing shares and paying cash, and raise supporting funds at the same time. Consider that the transaction price adjusted for dividends in the future is 18.814 billion yuan.
The acquisition draft is on the ground, and the short-term expected cash flow damage leads to a decline in valuation. there are two main differences between this latest acquisition plan and the 2018 plan.
(1) the difference between this assessment of GS and the pre-assessment in 2018:
The GS 100 per cent stake is valued at about £4.444 billion, compared with a pre-valuation of £5.247 billion. The main reason is that the failure to pay rent in Hong Kong constitutes a breach of contract, which has an impact on the short-term future expected cash flow, resulting in a significant decline in the GS assessment value.
(2) the underlying assets of this transaction do not include the 12% equity held by Delixun as of the evaluation base date.
Three core advantages contribute to long-term sustained growth, performance commitment to enhance confidence in the project under construction is expected to add 92000 square meters of construction area, 161MVA power capacity.
A number of core advantages ensure the continued growth of the company's hand-on-hand and under-construction business:
(1) the scarcity of location ensures a certain bargaining power and customer retention.
(2) all properties and most of the land are owned and adjacent to each other in the same area, with sufficient land reserves and low fixed operating costs to meet the needs of future development.
(3) diversify and stabilize the customer base with high quality and consolidate its ability to stabilize the contract price.
Performance commitment to maintain a stable climb on hand orders: the "evaluation report" predicts that 2020Universe 2021x2022max will achieve 124 million pounds / 145 million pounds / 199 million pounds / 266 million pounds respectively in 2023, and 2021 prime 2022 pounds will maintain year-on-year growth rates of 16.7%, 37.4% and 33.6%, respectively. Performance commitment is the predicted value.
Join hands with the strategic layout of the national team to "calculate the East and the West", and the industrial alliance of "calculating the East and the West" in the Chinese market has been established, which aims to give full play to the advantages of local energy and computing resources in Gansu Province, combined with the industrial advantages of the digital economy in Shanghai and Shenzhen.
Join hands with the strategic layout of the national team to develop the domestic data center market: in order to promote the pilot work of the industrial alliance, the Gansu provincial government, Guoxin Zhongji Investment Co., Ltd., Shagang Group and GLP Investment (Shanghai) under the State Information Center recently established a national big data industrial investment fund with a capital of 35 billion yuan. Among them, Shagang Group and Guoxin China jointly set up Shanghai Shagang Guoxin big data Mother Fund (the first phase) invested 5 billion yuan, Shagang Group will set up a platform company, Shanghai Jinhuan Fund Investment Management Company, invested 30 billion yuan, mainly layout domestic IDC construction to meet the needs of the IDC market.
Investment suggestion
Considering the merger factor, based on the latest future forecast cash flow model of GS after considering the influence of Dudley Schindler, the revenue in 2020-2022 will be reduced from 20.2 billion yuan / 24.4 billion yuan / 29.1 billion yuan to 17.1 billion yuan / 17.4 billion yuan / 18.4 billion yuan, and the net profit of returning home will be reduced from 2 billion yuan / 2.9 billion yuan / 3.6 billion yuan to 1 billion yuan / 1.1 billion yuan / 1.4 billion yuan, corresponding to the current price PE of 29X/27X/22X, maintaining the "overweight" rating.
Risk hint
Acquisition progress is not as expected; overseas renewal rate reduces risk; domestic business expansion is not as expected; systemic risk.
