occurrences

The company released its 2023 semi-annual report. 2023H1 achieved operating income of 0.292 billion yuan, an increase of 25.77% over the previous year; net profit of -0.032 billion yuan, an increase of 21.81% over the previous year, net profit after deducting non-return net profit of -0.035 billion yuan, an increase of 21.04% over the previous year.

On a quarterly basis, in 2023Q2, the company achieved operating income of 0.149 billion yuan, an increase of 30.81% over the previous year; net profit of -0.013 billion yuan, an increase of 51.57% over the previous year, net profit after deducting non-return net profit of -0.014 billion yuan, an increase of 53.69% over the previous year.

reviews

The recovery of traditional printing business

The company's overall revenue growth in 2023H1 showed a recovery trend. By product, the company's ticketing products achieved revenue of 0.218 billion yuan, an increase of 28.62% over the previous year, and packaging office paper achieved revenue of 0.049 billion yuan, an increase of 6.6% over the previous year. We believe that with the orderly recovery of economic activity, we have laid a good foundation for the growth of the company's traditional printing business.

Laying out AI computing power and signing multiple strategic customers, the company signed a four-party cooperation agreement with Zhongguancun Zhongheng Culture and Technology Innovation Service Alliance, Nvidia (NVIDIA), and Beijing Yingbo Digital Technology Co., Ltd. on August 10, 2022 to jointly establish the Beijing AI Innovation and Empowerment Center in Beijing to carry out project construction and operation service services in the field of artificial intelligence technology. The wholly-owned subsidiary Yingbo Digital is the operator of the Beijing AI Innovation and Empowerment Center.

According to Yingbo Digital's official account, as of June 15, 2023, the company has signed an order for a 5120P artificial intelligence computing power rental service agreement, and has conducted close cooperation and negotiations with customers including cloud service providers, vertical model training companies, many well-known top three hospitals, overseas finance, multimedia social networking, etc.

According to the company's response to the Shenzhen Stock Exchange's letter of concern on July 7, 2023, as of July 7, 2023, Yingbo Digital had more than 300P of AI computing power, and had invested in commercial leasing and project research and development. Among them, the 100P intelligent computing center planned for the first phase of the project had already begun production, and generated project revenue and profits in May 2023.

As of June 30, 2023, the company's net fixed asset value was 0.478 billion yuan, an increase of 18.4% over the previous year. This shows that the company's AI computing power-related business is progressing smoothly, and the related equipment purchased has been confirmed to the asset side one after another.

Profit forecasting and valuation

Considering that the growth of the company's traditional printing business is picking up and the subsidiary's AI computing power-related business is progressing smoothly, we have adjusted our previous profit forecast. We expect the company to achieve operating income of 754, 11.91, and 1,546 billion yuan in 2023-2025, and net profit of 0.30, 0.82, and 212 million yuan. Referring to the closing price on August 29, 2023, the corresponding PE multiples for 2024-2025 were 237/92 times, respectively, maintaining the “increase in holdings” rating.

Risk warning

The AI Innovation Empowerment Center operated by the subsidiary Yingbo Digital Technology fell short of expectations; the company's supply chain was affected by the deterioration of Sino-US relations; some of the company's actual controller's shares were frozen; and the company's stock price fluctuated drastically