1H23 profits are growing rapidly; end customer demand and shelving rate are steadily increasing. The company issued a pre-increase announcement on the results for the first half of 2023. The company expects to achieve a net profit of 66.56 million yuan to 74.88 million yuan in 2023, an increase of 60% to 80% over the same period last year. This is mainly due to the gradual increase in business demand of the company's end customers, the gradual power up of the data center cabinets that have been put into operation, and the gradual release of production capacity.
In the long run, we believe that the promotion of "digital China" policy and the development of new applications such as AIGC will continue to drive the demand of the IDC industry, and the company is expected to continue to strengthen its competitiveness with its core resource reserves. We estimate that the company's EBITDA for 23-25 years will be 11.76 picks up to 1.628 billion yuan. Taking into account the impact of the short-term shelving rate of new projects, give the company 15 times the 23-year EV/EBITDA (comparable company average:
19.34), corresponding to the target price of 33.02 yuan, maintain the "buy" rating.
Business scale continues to expand steadily; production capacity release brings profit growth since 2023, the company has responded positively to the national strategy of "digital China" and "counting east and west". At present, Datacenter Tonghuailai data center base has been officially opened for operation. it will form a strategic cluster of Beijing-Tianjin-Hebei data center around the capital with the company's Zhangbei, Langfang and Beijing Fangshan data center bases. According to the company's official website, the company's IT load has reached 371.1MW, and the operating scale of the data center has reached 35, which translates into about 74200 standard cabinets, which are located in the core hub nodes. In terms of greening, the company advocates green energy conservation in the whole life cycle of the data center, and the annual minimum PUE of the national operating data center can reach 1.09. We believe that with the gradual release of the capacity of the company's already operational data center projects and the large-scale computing demand brought about by the commercialization of Al, the company's profits are expected to continue the current good growth trend.
With leading competitiveness, new applications such as AIGC are expected to drive long-term industry demand growth. In the "Analysis report of China's third-party data center service providers" released by China Institute of Information and Communication, with its outstanding strength in the data center field, it has won the title of "Chinese third-party data center service provider influence TOP10". In recent years, with its forward-looking strategic layout in Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macau Greater Bay Area "East number" hubs and Inner Mongolia Wulanchabu and other "West calculation" nodes, the company has established a computing power of 20 billion operations per second for key customers, and can widely support the development of artificial intelligence, AIGC and other fields. We believe that with the gradual commercial landing of AIGC, the data center, as the underlying infrastructure carrying data storage, transmission, and computing requirements, is expected to usher in a new round of growth opportunities.
Be optimistic about the long-term growth space and maintain the "buy" rating
We are optimistic that under the trend of increasing demand for new applications such as Digital China and AIGC, the company's EBITDA and profit growth momentum will continue. It is estimated that the company's EBITDA for the year 23 to 25 will be 11.76mobil13.73 / 1.628 billion yuan respectively. The 23-year comparable company Wind unanimously expected the average EV/EBITDA to be 19.34 times. Taking into account the impact of the cabinet shelving rate of the short-term new project, the company was given 15 times the 23-year EV/EBITDA, corresponding to the target price of 33.02 yuan, maintaining the "buy" rating.
Risk hint: customer power-up progress is not as expected; project construction and delivery progress is not as expected.