Incidents:

On the evening of August 19, the company released its financial report for the first half of 2019: operating income of 2,699 billion yuan in the first half of 2019, an increase of 11.86% over the previous year; realized net profit of 406 million yuan, an increase of 37.28% over the previous year.

Comment:

The performance slightly exceeded expectations, and IDC's business performance was beautiful

During the reporting period, the company achieved total revenue of 2,699 billion yuan, an increase of 11.86% over the previous year, and achieved net profit of 406 million yuan to mother, an increase of 37.28% over the previous year. Net profit after deducting non-recurring profit and loss was 385 million yuan, an increase of 46.57% over the previous year. Among them, 2Q19 achieved non-return profit of 190 million yuan, an increase of 50.15% over the previous year. The performance was impressive, slightly exceeding market expectations. The IDC business became the biggest highlight. During the reporting period, the company's IDC business achieved total revenue of 889 million yuan, an increase of 31.08% over the previous year. As the listing rate increased, gross margin increased dramatically. The information technology business performed steadily, and revenue increased 8.71% year-on-year during the reporting period.

Cash flow continues to improve, and projects under construction have reached a new high

During the reporting period, the company achieved a net operating cash inflow of 494 million yuan, an increase of 49.10% over the previous year, mainly benefiting from the increase in sales scale and operating profit. The project under construction was 850 million yuan, an increase of 345.9% over the previous year, mainly due to an increase in investment expenses for the Baozhiyun IDC Phase IV construction project. The project under construction reached a new high. After the project is completed, it is worth looking forward to the release of performance.

IDC+ steel information-based two-wheel drive, broad long-term space

(1) On the IDC business side: Baozhiyun Phase IV delivery+Wuhan project implementation will drive the IDC business to continue to grow at a high rate. The construction of the fourth phase of the Baozhiyun project continues to advance, and the listing rate continues to increase, directly driving IDC's business growth. The Wuhan data center project plans to build 18,000 20A cabinets in three stages. After completion of the project, the center will become the largest single big data and cloud computing center in central China. The company's IDC business has officially started nationwide, and business expansion is worth looking forward to; (2) Steel IT: Baowu merger and Ma Steel merger and acquisition brought about business growth, and it is expected that the high growth of the company's steel information technology business will continue for 3-5 years.

Investment advice: IDC's business prospects are broad. The steel information technology business continues to be booming. It is optimistic about the company's business development prospects. The company is expected to achieve net profit of 8.50, 10.82, and 1,361 billion yuan in 2019-2021, maintaining a “buy” rating.

Baoxin Software(600845) Semi-annual report review: Performance slightly exceeded expectations, two-wheel drive has broad prospects