IT service leader, edge computing+ skits bring new momentum to growth Netsu Technology provides information technology services such as computing, storage, network and security, empowering Internet, government and enterprise customers with fast, stable, and secure IT capabilities. Taking into account: 1) Q1-Q3 net profit without return to mother maintained a high year-on-year growth level (44.06%/194.56%/88.83%); 2) Continued promotion of the “2+3” layout of core+innovative businesses; 3) edge GPU computing power platform+ skits are expected to bring new growth momentum to the company's business. We expect the company's net profit to be 335/4.07/477 million yuan in 23-25 years. Comparable to the company's 24E average PE 50.7 times (iFind), the target price is 8.62 yuan, and the “increase in holdings” is maintained.
Continuous iteration of core business: edge KV+SASE+zero trust
In terms of edge computing, Netsu Technology's distributed and lightweight storage technology service “Edge KV” supports reliable data replication and synchronization between multiple edge nodes, as well as data fragmentation and load balancing, to improve data reading and writing efficiency. In terms of cloud security: 1) Continue to promote the construction of the “3+X+AI” SASE system, open up the three major capabilities of networking, security, and edge computing, and integrate AI capabilities into all aspects of security defense. In July 2023, the company was listed by Gartner as a benchmark manufacturer in the SASE field; 2) it launched a comprehensive zero-trust solution integrating RBI+SWG+EDR+ZTNA+ data leakage prevention around “reliable identity, trustworthy terminals, trustworthy behavior, data trustworthiness and platform security” to help take enterprise security one step further.
Innovative business continues to upgrade: MSP service+liquid cooling technology
In terms of MSP services, the BigOps integrated operation and maintenance management platform obtained mutual compatibility certification from Unicom and Kirin; BigV, a large screen for data visualization, was launched to provide rich industry templates and practical components to meet the graphical display and visualization needs of enterprise data sources. In terms of liquid cooling technology, the submerged liquid cooling technology independently developed by the subsidiary Green Yuntu covers micro, medium and large container data center solutions, and can meet the customized needs of various industries. In December 2023, the “Data Center Immersive Liquid Cooling System Single Phase Coolant Technical Specifications and Test Methods”, led by the company and Green Cloud Map, was officially released, effectively filling gaps in industry standards and further promoting the implementation of immersive liquid cooling technology.
New momentum for growth: marginal computing power+skit going overseas
Edge computing power+going overseas is expected to bring new growth momentum to the company. In August 2023, the company launched an edge GPU computing power platform, which provides high-performance GPU computing power resources based on globally distributed node resources, significantly improving graphics processing and floating point computing capabilities. It can be applied to various application scenarios such as AI inference, graphics rendering, video processing, cloud gaming, and AIGC. According to data from Ai Media Consulting, the number of online short dramas distributed in China reached 150 in 23Q3, double that of the whole year in the past 22 years. The company fits the business scenarios and needs of skit overseas companies, creates solutions for the skit overseas industry, and solves problems such as uploading, distribution, media processing, video playback, and copyright protection in one stop to help enterprises go overseas.
Risk warning: AI technology has fallen short of expectations, and the competitive landscape of the CDN industry has deteriorated.