Incidents:
Yunsai Zhilian released its 2023 annual report. In 2023, the company achieved revenue of 5.264 billion yuan, up 16.09% year on year; net profit to mother of 193 million yuan, up 6.70% year on year; net profit after deducting non-return to mother was 122 million yuan, up 146.92% year on year; gross margin was 17.99%, down 1.75 pct year on year. Looking at a single quarter, the company achieved revenue of 1,558 billion yuan in the fourth quarter, up 8.38% year on year; net profit to mother of 37 million yuan, up 31.11% year on year; net profit after deducting non-return to mother was 0.23 million yuan, down 4.40% year on year, and gross margin was 16.01%, down 5.97 pct year on year.
Actively lay out intelligent computing power
In 2023, the company and other shareholders such as Yidian Group jointly funded the establishment of Shanghai Intelligent Computing Technology Co., Ltd., actively laid out the intelligent computing power business, and further promoted the implementation of the “Improve IDC” strategy. The first phase of the Songjiang Big Data Center project was officially put into operation, and the 110KV power independent user station was put into use to achieve dual power transmission, making preparations for the expansion of the Songjiang Big Data Center. On May 16, 2023, the second phase of the Songjiang Big Data Computing Center obtained the energy consumption index for data center construction. On October 27, the company announced that it plans to start construction of the second phase of the Songjiang Big Data Center project and build about 1124 high-power racks, with a total IT power of 22MW, with a total investment of about 795 million yuan. It is expected to be delivered by the end of 2024. The amount of related transactions between the company and Shanghai Intelligent Computing Technology Co., Ltd. in 2023 is 362 million yuan, and the estimated amount of related transactions in 2024 is 667 million yuan.
High growth in industry solutions
Among the main businesses, cloud computing big data revenue was 2,543 billion yuan, down 1.19% year on year; industry solution revenue was 2.04 billion yuan, up 51.92% year on year; and revenue from intelligent products was 624 million yuan, up 12.11% year on year. The company's industry solutions mainly include the fields of urban safety management and smart livelihood. The future will be based on the intelligent computing power infrastructure, artificial intelligence vertical model application and big data operation capabilities that have been gradually accumulated so far to better empower industry applications and serve the digital economy.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2024-2026 to be 61.57/72.10/8.364 billion yuan, with year-on-year growth rates of 16.97%/17.11%/16.00%, net profit to mother of 2.46/3.25/ 453 million yuan, respectively, year-on-year growth rates of 27.52%/32.22%/39.20%, EPS 0.18/0.24/0.33 yuan/share, respectively, and a 3-year CAGR of 32.90%. In view of the company's deep participation in the digitization of Shanghai's cities and the launch of the second phase of the Songjiang Big Data Center project, which is expected to benefit from the development of the data element industry and the construction of computing power facilities, it is recommended to keep an eye on it.
Risk warning: Market competition increases risks, products and technology fall short of expectations, uncertain supply of computing power equipment, risk of rental price fluctuations, etc.