The company released its three-quarter report in 2022, with revenue of 1.6 billion yuan (+ 22.87%), net profit of 103 million yuan (+ 17.20%) and non-net profit of 58 million yuan (+ 10.77%) in the first three quarters. The company's server business has become a new growth pole, and the industrial chain and ecological layout continue to deepen, which is expected to embark on a new growth curve under the opportunity of domestic Xinchuang. Maintain the buy rating.
Support the main points of rating
Q3 high revenue growth, project rebate significantly improved. Q3 achieved a revenue of 665 million yuan (+ 61.52%), a net profit of 26 million yuan (- 5.27%), and a non-net profit of 18 million yuan (+ 22.91%). The income achieved high growth over the same period last year, and the growth rate of deducting non-net profit turned negative to positive. The gross profit margin in the first three quarters was 28.96%, lower 8.79pct than the same period last year and 3.33pct lower than the previous quarter. The net operating cash flow in the first three quarters was-102 million yuan, an increase of 48.61% over the same period last year, and the project rebate was significantly improved.
Server business has become a new growth pole, and large-scale procurement has been accelerated. The substantial increase in Q3 revenue is mainly driven by the server business. Recently, due to the acceleration of procurement and localization, the large-scale collection of Kunpeng servers has been accelerated: (1) according to the information on the official website of Shenzhen Electronic Chamber of Commerce, China Mobile Limited collected 210000 PC servers from 2021 to 2022, a total of 34283 Kunpeng servers accounted for 16.21%. (2) according to the information of the recruitment network, the collection of Kunpeng server will be accelerated again in the second half of the year. Hebei Bank won the bid for 10.97 million yuan of Kunpeng server in June, Guangdong Unicom won the bid of 57.13 million yuan of Kunpeng server in August, and the Kunpeng server collection project of 28.48 million yuan of CDB won the bid in September. In October, Huawei won the exclusive bid for the second phase of Changsha government affairs cloud 285 million yuan service procurement project, including the construction of Kunpeng resource pool. As the main force of Huawei Kunpeng ecology, the server business is growing rapidly.
The industrial chain and ecological layout continue to deepen to meet the opportunities of domestic innovation. The company's cooperation with Huawei in Kunpeng, Teng Teng, Hongmeng and HuaWeiYun has been deepened, and has formed a full-stack IT industrial chain layout covering Kunpeng server, basic software and application software. In addition, through its subsidiaries Yunshang Kunpeng in Guizhou and Jiuxiao Kunpeng in Gansu Province, the company has laid out the "East and West" computing nodes in advance to meet the demand for large-scale servers and related facilities brought about by the construction of computing power in the western region. At present, the continuous acceleration of domestic Xinchuang procurement is first reflected in the party and government, finance and telecommunications industries. It is expected that Xinchuang procurement in many industries will enter a peak investment period in the future. At the same time, Kunpeng server has a clear priority under the requirements of localization. We expect the company's server business to double, driving its performance into a new growth curve.
Valuation
Maintain the forecast of net profit of 156 million yuan, 240 million yuan and 331 million yuan in 2022 and 2024, and EPS of 0.12,0.19,0.27 yuan, corresponding to PE of 57,37 and 27 times, respectively. Under the opportunity of domestic Xinchuang, the company's Kunpeng server business is expected to maintain rapid growth. Maintain the buy rating.
Main risks faced by rating
The policy landed less than expected; the epidemic repeatedly affected the implementation and delivery of the project.