Event: Baoxin Software releases its 2023 Annual Report. In 2023, the company achieved operating income of 12.916 billion yuan, -1.78% year-on-year; realized net profit to mother of 2,554 billion yuan, +16.82% year-on-year.
The annual results were in line with expectations, and the results of cost reduction and efficiency were remarkable; the gross margin of all three businesses grew rapidly, and the share of revenue from high-margin businesses increased. Throughout 2023, the company's gross margin was 36.92% (+3.89pct year on year), and the net margin was 20.22% (+3.10pct year on year). By business, the company's software development and engineering services, service outsourcing and system integration businesses achieved revenue of 93.22/34.91/93 billion yuan respectively, or -2.80%/+2.38%/-33.32%, respectively; gross margins were 32.16%/50.26%/11.09%, respectively, +3.45pct/+4.22pct/+1.61 pct, and profitability continued to increase.
In line with technological development trends, Baozhiyun's information infrastructure service capabilities are continuously optimized. The company has the full life cycle management and service capabilities of next-generation information infrastructure services. Relying on the “East Digital and Western Computing” industry policy, the company lays out and constructs computing power and cloud computing nodes around the needs of national computing power hubs, key regions, and key customers. Based in Shanghai, the company deeply cultivates existing customers, expands cooperation channels, and actively promotes project construction and market expansion at various Baozhiyun bases. At the same time, through improving cloud operation and management capabilities and innovating operating models, the company introduced public cloud and Xinchuang cloud technology platforms, which effectively supported the expansion of the cloud service market.
The capital was increased to hold Turing Robotics, and the robotics business created a new growth pole. In 2023, the company built and completed the Baoluo demonstration production line for related application scenarios; promoted large-scale robot access to the Baoluo Cloud platform, BOO and RaaS models were implemented at multiple steel bases; and the first R&D application of inspection robot dogs and mobile temperature measurement and sampling robots in front of the furnace progressed smoothly. Furthermore, the company took control of Shanghai Turing Intelligent Manufacturing Robotics Co., Ltd. through a cash capital increase to strengthen industrial competitiveness in the field of high-end industrial robots.
Investment advice: We predict that the company's revenue for 24-26 will be 145.47, 16.9.28 billion yuan, and 20.039 billion yuan, respectively, and net profit to mother will be 2,986 billion yuan, 37.91 billion yuan, and 4.876 billion yuan respectively. The company's data center resource endowments and industrial Internet business advantages will not change, maintaining a “buy” rating.
Risk warning: IDC construction and listing progress falls short of expectations; demand for steel informatization falls short of expectations; technological progress of industrial Internet products falls short of expectations.