Description of the event

Kehua Data released its three-quarter report for 2023. 2023Q3 achieved revenue of 2.105 billion yuan, an increase of 47.25% over the previous year, an increase of 10.43% over the previous year; net profit of 123 million yuan, an increase of 0.96% over the previous year, a decrease of 30.74% over the previous year; and deducted non-net profit of 121 million yuan.

Incident comments

Judging from the overall business trend, there has been positive growth in the company's new energy business shipments, and profitability is still quite impressive. In addition, the company's 2023Q3 calculated asset impairment of 43 million yuan, credit impairment of 11 million yuan, and net investment income of -23 million yuan, which put a pressure on single-quarter earnings.

In terms of the new energy business, the company's revenue is expected to grow relatively rapidly, thanks to the increase in the company's PCS market share and the active implementation of system solutions. At the same time, the company's overseas projects are progressing steadily. In terms of profitability, the gross margin of new energy is expected to increase slightly month-on-month in 2023Q3, which is better than the industry. On the one hand, it is related to the improvement of the company's internal management efficiency and supply chain control capabilities, and on the other hand, it is also the optimization of the company's product structure. PCS with high gross margins and the acquisition of high-quality domestic projects also support profitability.

In terms of data center business, the company's IDC service revenue declined slightly, mainly affected by fluctuations in cabinet availability rates. Recently, the company officially announced the tenth self-built data center. As the first approved “Industrial Internet+AI” data center in Beijing, it can accommodate about 2,200 cabinets, with a single power cabinet up to 20KW. The project is located in Beijing, where resources are scarce, and is expected to be officially put into use in 2024. At that time, as the cabinet climbs up and onto the shelves, it is expected to contribute greater revenue and profit elasticity to the company. Furthermore, the company had an early layout in the field of computing power, cooperated with domestic chip manufacturers, and launched various products to meet the needs of computing power deployment in different scenarios of AI computing power. The company has experience in cooperating with large Internet customers in the IDC field, and is expected to form a competitive advantage after the large-scale explosion of computing power demand.

Risk warning

1. Demand for new energy vehicles and energy storage terminals falls short of expectations;

2. Competition in the industrial chain has intensified.