What happened: on August 23, 2023, SinoCom disclosed that the company's operating income in the first half of 2023 was 2.826 billion yuan, down 4.12% from the same period last year; the net profit from home was 250 million yuan, up 8.19% from the same period last year; and the net profit from non-return was 211 million yuan, down 4.5% from the same period last year.
Comments:
The postponement of national network bidding affects the company's medium-term performance. During the reporting period, the company's operating income decreased compared with the same period last year, mainly due to the delay in bidding caused by the inspection of the national network and the lag in the signing progress of the company. We believe that, on the one hand, the annual bidding plan of the State Grid has been completed at the beginning of the year, and the extension of Q2 bidding will be resumed in Q3 one after another; on the other hand, the new power system and the digital transformation of energy are the long-term construction goals of the power grid, and the willingness to invest digitally will not weaken in the short term. Therefore, the magnificent demeanor of the industry and the investment target of the national network form a strong support for the company's annual performance.
The revenue of electric power digitization has increased significantly, and the online work of Marketing 2.0 has continued to advance. During the reporting period, the company's electric power digitization business achieved an operating income of 713 million yuan, an increase of 215% over the same period last year. In terms of marketing system, the company launched the marketing 2.0 system in Hunan, Shanxi and Shanghai, and started the construction of marketing 2.0 in Ningxia, northern Hebei, Jiangxi and Chongqing. In terms of market-oriented trading services, the new generation of power trading system developed by the company takes the lead in realizing the functions of identity authentication, license retention and electronic signature based on electronic business license in the national power industry, supporting the efficient operation of the electronic business license system of Jiangxi electric power trading retail platform. In terms of enterprise smart energy services, the company completed the second phase of the new power load management system and reached a preliminary cooperation intention with power companies in 8 provinces and cities, including Tianjin and Shanxi, and approached with Zhejiang, Hunan and other provincial power companies to build the coordination and command capacity of load management centers. The general trend of power marketization remains unchanged, so we expect that power digital business will still be the core growth point of the company's performance in recent years.
The business of enterprise digitization and cloud network infrastructure has declined slightly, and the demand for the construction of China Taiwan is still strong. During the reporting period, the company's enterprise digital business achieved revenue of 552 million yuan, down 13.8% from the same period last year. Among them, the company realized the data connection of the two enterprise applications of first-level human resources ERP and wisdom shared financial platform in Zhejiang. The revenue of the company's cloud network infrastructure reached 1.549 billion yuan, down 25.0% from the same period last year. Among them, the company remained competitive in the business of IoT platform, and assisted the headquarters of the State Grid Company to complete the in-depth application of 12 typical scenarios, such as the implementation of IoT platform operation and maintenance of 24 provincial companies, and power transmission and distribution. It is expected that with the resumption of national network bidding, the company's enterprise digitization and cloud network infrastructure revenue growth will return to normal for the whole year.
Investment advice: maintain a buy rating. It is estimated that from 2023 to 2025, the company will achieve operating income of 88.79 million yuan, an increase of 16.6 percent, 11.7 percent, 10.5 percent, and a net profit of 9.6 percent, 11.05 million yuan, an increase of 19.7 percent, 15.2 percent, 11.0 percent.
Risk hint: power grid bidding and power information investment are not as expected.