Events:

On October 25, 2023, the company released the third quarter report of 2023. In the first three quarters of 2023, the company realized operating income of 5.501 billion yuan, an increase of 51.04% over the same period last year; net profit of 445 million yuan, an increase of 54.39% over the same period last year; net profit of 421 million yuan, an increase of 56.84% over the same period last year; and basic earnings per share of 0.96 yuan, an increase of 54.84% over the same period last year.

Income continues to grow rapidly, and asset impairment losses affect Q3 net profit:

Under the strategic layout of "Kehua data" and "Kehua Digital Energy", the company actively gives full play to the company's advantages in technology, products, solutions and services, and constantly promotes product innovation. we will actively open up the development space of overseas markets and new business, and achieve the rapid growth of the company's business performance, among which the new energy business is growing rapidly. In the first three quarters of 2023, the company achieved operating income of 5.501 billion yuan, an increase of 51.04% over the same period last year, a net profit of 445 million yuan, an increase of 54.39%, and a non-return net profit of 421 million yuan, an increase of 56.84% over the same period last year. Of this total, Q3 achieved an operating income of 2.105 billion yuan in the single quarter, an increase of 47.25% over the same period last year; the asset impairment loss and credit impairment loss of the Q3 company totaled 53.88 million yuan, an increase of 589% over the same period last year; affected by the substantial increase in asset impairment losses, the Q3 company achieved a net profit of 123 million yuan in the single quarter, an increase of 0.96% over the same period last year.

The world's first 125KW UPS power module, liquid cooling solution for high-density servers:

According to the company's official account, in terms of computing power improvement, the company's global premiere 125KW UPS power module takes the lead in making a breakthrough in power density to fill industry gaps and better meet the power supply and distribution needs of high-computing data centers with higher efficiency and higher security. At the same time, the data center supports the customization of ultra-high power and ultra-high power cabinets, combined with efficient heat dissipation technology, which can support the operation of high-power and high-performance servers. In terms of energy saving and emission reduction, Kehua launched liquid-cooled products such as drawer liquid-cooled, cabinet-type liquid-cooled and liquid-cooled micro-modules, which can meet the heat dissipation of high-power and high-density cabinets while reducing the PUE value. Kehua data Wise Cooling liquid cooling solution is specially designed for high-density servers, from cold plate liquid cooling solutions to immersion liquid cooling solutions, serving high-density servers in a full range of services, through liquid cooler cabinet, internal circulation, heat exchange cooling, internal and external control and other equipment, solve server hot issues, create a low-temperature environment of the chip, prolong its service life, and overclock operation at the same time, so as to improve computing power output. Kehua cold plate liquid cooling solution is not only suitable for the new large data center, but also for the transformation of the old computer room, it can realize the system PUE < 1.2. it has a wide range of applications and excellent performance. The Intelligence Center of Jiageng Innovation Laboratory quotes Kehua 400kw liquid-cooled CDU, the power density of single cabinet can be up to 50kw, and PUE < 1.2can be realized.

Ranked first in China's large retail data center enterprises, actively layout computing solutions:

According to the company announcement, as a leading data center integrated service provider in the industry, the company has 9 big data centers and more than 30,000 self-owned cabinets in North, Shanghai and Guangzhou. The main customers include three major operators, Tencent, Huawei Cloud and other large Internet enterprises, major financial institutions, government agencies and so on. According to a recent research report by the company's official account and Sullivan, a third-party organization, the company ranks first among large retail data center enterprises in China with an average shelving rate of 80%. Since the beginning of this year, the company has actively laid out the computing business, laying out the computing business product technology in the data center of Beijing, Shanghai and Guangzhou. At present, the company has cooperated with Tencent, Flint Technology, Muxi, Yizu Technology and other enterprises to launch AI bare metal leasing, GPU computing pool, cloud elastic computing, AI computing service platform and other industry solutions, while providing high motor cabinet hosting, Internet access, private line transmission, cloud dedicated line, SD-WAN networking, multi-cloud connection platform and other products and services. Combined with Kehua's own green energy-saving technologies such as liquid cooling, photovoltaic and energy storage, the computing-related business is expected to add momentum to the future development of the company to meet the needs of customers'AI application scenarios, such as high computing power, low delay, green and low carbon, safety and reliability.

Investment advice:

The company is a high-tech company with double materials on the power generation side. We estimate that the company's revenue from 2023 to 2025 will be 86.24 trillion yuan, 114.64 billion yuan, 15.416 billion yuan respectively, an increase of 52.7%, 32.9% and 34.5%, respectively, compared with the same period last year. The net profit of returning to the mother is 676 yuan, 908 yuan, 1.237 billion yuan, an increase of 172.2%, 34.3%, 36.3%, respectively. The corresponding EPS is 1.46amp 1.97pm 2.68yuan respectively.

We give the company 22 times PE in 2023, corresponding to the target price of 32.12 yuan, and maintain the "buy-A" investment rating.

Risk hints: domestic industrial policy is not as expected, new energy industry development is not as expected, market competition is intensified, asset impairment loss, overseas demand is not as expected risk