Main points of investment

Performance:

On August 23, 2023, the company released its 2023 semi-annual report. In 23 years, H1 achieved revenue of 26.72 billion, an increase of 17.51% over the same period last year, realized net profit of-149 million, reduced losses by 53.56%, and deducted non-net profit of-183 million, reducing losses by 48.56% over the same period last year.

In terms of cost, in 23 years, the operating cost of H1 company increased by 17.09% compared with the same period last year, of which the operating cost of engineering services business in high-tech industry increased by 21.97% compared with the same period last year, while the operating cost of digital and information services business decreased by 53.60% year-on-year, which was related to the change in revenue.

With the accelerated development of the data factor market, "China Electronic Cloud" is growing at a high speed. "China Electronic Cloud" is the leader of China Xinchuangyun. In the first half of 2023, the company continued to make breakthroughs and achieved rapid development in product capabilities and self-developed product lines. One is to provide computing power-based platform products, including dedicated cloud CECSTACK (which can support more than 70 products and more than 4600 specifications. It also supports 20, 000 servers on a single cluster scale, super-converged CeaCube (supports deployment in X86, C86 and ARM environments), etc. The second is to provide data management platform products, including intelligent data cloud, overlooking data center, etc.; third, distributed cloud full stack global solutions, including operational cloud, private cloud, branch cloud, edge cloud and so on. We believe that the company also has strong competitiveness in the e-cloud sector: compared with Internet manufacturers, Shen Sangda has significant advantages in the channels of the government and central state-owned enterprises, and is expected to play an important role in the construction of SAC.

Sustained and steady development of engineering service business in high-tech industry

The company provides clean room consulting, design, construction, operation as the core of high-tech industry engineering services, since its inception focused on serving electronic information, biomedicine, new infrastructure, new energy in the field of high-tech industry customers.

In the first half of 2023, the company's revenue from this business was 25.133 billion yuan, an increase of 22.72% over the same period last year, mainly because the company continued to consolidate its dominant position in the field of industrial services. continue to serve customers in strategic emerging industries such as high-tech electronics, integrated circuits, biomedicine, new energy, new infrastructure and other strategic emerging industries, and related business contracts grow steadily, driving revenue growth. We believe that the high-tech industry has boosted the company's e-cloud business. With strong self-research ability and high-quality cooperation groups, we can constantly expand the core competitiveness of products and services, have more secure domestic software and hardware, but also more in line with the needs of Xinchuang, and the revenue space is vast.

Digital and information services promote the transformation of products in an all-round way

In the two major business areas of cloud computing and storage and data innovation, the company shoulders the strategic mission of Sinicization and modernization in the field of "cloud number". Undertake cloud computing and storage, data innovation, digital government and industry digital services three digital and information service business. In the first half of 2023, the revenue of the business was 361 million yuan, down 54.79% from the same period last year, mainly due to the company's overall transformation to a high-tech and product company, taking the initiative to reduce the scale of pure integration business, and the unrealized revenue of some projects in the delivery process. We believe that the company is in the leading position in the industry in digital and information services, and has built a mature industrial chain, and is expected to remain competitive in the era of data factor market industrialization in the future.

Digital heating and new energy services realize digital transformation in an all-round way

The company's digital heating business aims at low carbon, comfort and efficiency, and now has the ability of end-to-end automation and intelligent control. In the first half of 2023, the revenue of the business was 1.057 billion, down 1.22% from the same period last year.

The company has fully realized the digital transformation in this field, while providing users with high-quality services, energy conservation and emission reduction has also achieved remarkable results, and the energy consumption level is in a leading position in the industry.

Profit forecast and valuation

We predict that the company will achieve revenue of 570.95 million yuan in 2023-2025, with a year-on-year growth rate of 11.84%, 13.07%, 13.75%, and 188.77%, 55.18%, 38.29%, 0.27, 0.42, and 53.57%, respectively, and the corresponding PE is 114.95, 74.07 and 53.57 times, respectively. Maintain the "overweight" rating.

Risk hint

Macro environmental risk, policy promotion is not as expected risk, R & D investment affects the overall operating performance of the company.