Main points of investment
Performance:
On August 11, 2023, the company released its semi-annual report in 2023. In 23 years, H1 achieved revenue of 515 million, down 42.82% from the same period last year; net profit returned to its mother was-298 million, down 1953.29% from the same period last year; and non-net profit was deducted from-334 million, down 2654.68% from the same period last year.
Business structure transformation, adhere to two-wheel drive
In the first half of 2023, the company continued to strengthen data factor operation business investment and speed up the adjustment of business structure. Revenue from the company's data operations and services business increased by 24% over the same period last year. The overall decline in revenue is mainly due to the company's initiative to tighten the development of project-based business, including data lake construction and government-enterprise digital integrated cushion business, and the overall operation pays more attention to the promotion of cash flow. Due to the large base and rapid decline of project-based business revenue, the company's overall revenue declined compared with the same period last year.
In terms of profits, due to fixed expenses such as labor costs, depreciation and amortization and financial expenses, which are not in proportion to the scale of income, and the company has strengthened its R & D investment in new projects, R & D expenses have increased compared with the same period last year, resulting in a decline in the company's profits in the current period.
The company will strengthen the "data base + data elements" two-wheel drive development strategy, continue to improve revenue scale and revenue quality, and strive to achieve comprehensive performance goals.
The data lake is expected to take the lead in realizing the realization of data elements.
The data Lake project has been initially covered all over the country, and its core is that the data elements are traded and realized as assets. The urban data lake that the company has landed covers six parts of the eight national hub nodes of the project: Beijing, Tianjin, Hebei, Yangtze River Delta, Chengdu, Chongqing, Guangdong, Hong Kong, Macao, Ningxia and Guizhou. It has become the standard configuration of the new generation digital economic infrastructure and urban data base. At the same time, the first easy-to-count factory has successfully landed in Fuzhou, laying a good foundation for the company to replicate and land in other cities in the future.
The company's business conforms to the policy orientation and opens up the market opportunities for data elements. The Beijing Public data Zone Authorization Operation Management measures (draft for soliciting opinions) clearly carry out authorized operations on the premise of protecting personal privacy and ensuring public safety. We believe that Beijing, as a policy highland, will lead the construction of the national market for local data elements, accelerate the landing of national policies, and continue to facilitate the participation of central enterprises in the development of local data. The management measures of Beijing are highly consistent with the company's concept of business promotion in the field of data elements, and the company has been deeply engaged in public data authorization operation for many years, and has landed the country's first government data authorization operation "Fuzhou model" based on "data bank". And cooperate with Henan to promote the construction of data trading center, and actively participate in the operation of public data authorization in provinces and cities.
Profit forecast and valuation
We estimate that the company's operating income from 2023 to 2025 will be RMB 1.856 million, respectively, with an increase of 15.71%, 63.3% and 52.52%, respectively, compared with the same period last year. The net profit of homing in 2023-2025 will be-0.067 million, respectively, and the year-on-year growth rate will be-158.06%, 5037.75%, 44.01%, corresponding to PE 60.92 times in 2024, maintaining the "holding increase" rating.
The reason for the sharp decline in net profit forecast is that Hualu Group intends to integrate into China Telecom, resulting in a more coordinated business structure. We expect that in order to improve the efficiency of business coordination in the process of merger, we need a certain amount of cost investment, the cost has increased, and it is expected to return to the right track next year.
Risk hint
The risk of policy environment, the risk of brain drain of core technical personnel and management, the operational risk of data Lake Project Company, and the uncertainty risk that the integration has not yet been completed.