Event: the company released the mid-year report of 2023, the total operating income of H1 company reached 515 million yuan in 2023, down 42.82% from the same period last year; the net profit returned to the home was-2.98 yuan, down 1953.29% from the same period last year, and the performance was in line with market expectations.
Main points of investment
Business structure transformation, short-term performance pressure: the company's 2023H1 revenue decline year-on-year is mainly due to the company's initiative to tighten the project-based business development, business focus from data lake construction and government-enterprise digital integrated cushion business to light-asset data element operation and services. From the perspective of business, in 2023, the revenue of H1 government-enterprise digital business is 321 million yuan (year-on-year-19%), and the gross profit margin is 20.11% (year-11.77pct). Revenue from data operations and services is 150 million yuan (year-on-year + 24%) and gross profit is 38.16% (year-on-year-16.79pct). Digital economic infrastructure achieved revenue of 44 million yuan (year-on-year-88%) and gross profit margin of 20.71% (year-on-year-19.93pct). The year-on-year decline in profit margin was mainly due to the relatively large proportion of low-margin businesses built by the company and outsourcing, as well as depreciation and amortization brought about by the consolidation of new data center assets.
Local government data authorization operation continues to expand: the company builds easy-to-count workshop 2.0, using bank-like model, covering data asset registration and confirmation, data asset evaluation, data value operation, and the whole process business of data security circulation. The company has obtained the government data governance operation authorization of Xuzhou, Zhuzhou, Kaifeng and Fuzhou, and has traded cases of landing data elements in Sichuan, Guangdong, Henan, Zhejiang and other places to provide local customers with data products services based on agriculture, rural areas and farmers, vehicle ETC, inclusive finance, health, traffic data and so on. The company's 2023H1 data operation and service business revenue is expected to increase by 24% over the same period last year. In the future, with the promotion of policies related to data elements, data operation-related revenue is expected to achieve rapid growth.
The data lake builds the national data storage base: the company's super storage business is growing rapidly. 2023H1's super storage agreement sales are about 421PB, an increase of 163% over the same period last year, and the contract volume is up 153% over the same period last year. Relying on super intelligent storage technology, the company's data lake project continues to land, and has covered 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 present, 25 data lakes have entered the operation stage. We expect the company to continue to improve cloud and storage production capabilities and improve profitability in the future.
Profit forecast and investment rating: considering the company's large investment in the business transition period, we lowered the company's EPS forecast for 2023-2025 from 0.33 to 0.58 to-0.03 to 0.23 to 0.61. We are optimistic that the company has a significant first-mover advantage in the data factor market, and Hualu Group's proposed integration into the CLP is expected to bring financial and resource support and maintain the "buy" rating.
Risk hint: the competition in the industry intensifies, the policy promotion is not as expected, and the landing rhythm of the project is not as expected.