Event: Sinnet released its quarterly report for the third quarter of 2023: the company achieved operating income of 5.933 billion yuan in the first three quarters, an increase of 8.43% over the same period last year, a net profit of 354 million yuan, a decrease of 14.23% over the same period last year, and a net profit of 347 million yuan, a decrease of 10.30% over the same period last year.
Quarter-on-quarter performance repair. In the single quarter of Q3, the company achieved an operating income of 2.134 billion yuan, an increase of 14.08% over the same period last year, an increase of 11.11% over the same period last year, and a net profit of 101 million yuan, an increase of 27.42% over the same period last year, an increase of 27.68% over the previous quarter. As the company continues to adjust and improve its business strategy and adapt to market changes, the company's long-term development potential is still worth looking forward to.
Cloud computing business strengthens core competitiveness, and data centers drive long-term development. As the highest-level cloud computing consulting partner of Amazon.Com Inc, the company actively conducts industry dialogue, explores the new paradigm of the Intelligence Center based on cooperation advantages, realizes cloud ecological services with multi-level coverage from IAAS to PAAS and SAAS, and leads the domestic market.
The big model drives the demand for computing power, and the IDC business is expected to see high growth driven by AI. With the emergence and commercialization of large language models, data from the Ministry of Industry and Information Technology show that by the end of 2022, the total scale of computing power in China has reached 180EFLOPS, and the scale of the computing industry has reached 1.8 trillion yuan. Public cloud and Internet are the core driving forces of IDC business, benefiting from the market relationship and the obvious gap in computing power that AI is in short supply, the company establishes market competitiveness through public cloud stock competition and project reserves. The Beijing-Tianjin-Hebei region has a large public cloud customer base, Internet demand has expanded, and the irreplaceable value of the data center continues to increase; the company implements the "double carbon" policy and signed a strategic agreement with Huawei Technology Co., Ltd. to explore cooperation on smart energy, intelligent photovoltaic energy storage and intelligent networks at the product and service level.
Profit forecast: we forecast that the company's revenue in 23-25 will be 81.61,93.80 and 11.113 billion yuan respectively, and its net profit will be 5.34,6.51 and 862 million yuan respectively. We are optimistic about the layout of the company in the field of cloud computing and IDC under the background of the rapid development of AI, and maintain the "buy" rating.
Risk tips: IDC market demand growth is not as expected; IDC market competition is intensified; cloud computing demand is not as expected.