Key points of investment:
Incident: On April 18, 2024, Runze Technology released its 2023 annual report. In 2023, the company achieved operating income of 4.351 billion yuan, an increase of 60.27% over the previous year, and achieved net profit of 1,762 billion yuan, an increase of 47.03% over the previous year, after deducting non-net profit of 17.01 billion yuan, an increase of 50.18% over the previous year. The fourth quarter achieved revenue of 1,669 million yuan and net profit of 641 million yuan to mother.
Incident analysis:
The operation remains generally stable, and long-term incentives inject momentum. The company's main business includes IDC business and AIDC business.
It mainly provides server hosting services, operation and maintenance, and security management services. At the same time, it also provides intelligent computing services for customers with large terminal models. In 2023, IDC's business achieved revenue of 3.151 billion, an increase of 16.10% over the previous year, and gross margin of 54.46%. The new business AIDC achieved revenue of 1,199 million yuan, and gross margin of 33.1%. As of December 31, 2023, the company had total assets of 233 billion yuan, total liabilities of 14.7 billion yuan, net assets attributable to shareholders of listed companies of 8.5 billion yuan, a balance ratio of 63.34%, and a reasonable balance and liability structure. In 2023, the company implemented two cash dividend plans, the first of which was an interim cash dividend. Based on the total number of shares of 1,716,961,649 shares, a cash dividend of 3.90 yuan (tax included) was distributed for every 10 shares, with a total dividend of 669.615 million yuan. Subsequently, in order to further give back to shareholders, the board of directors proposed an annual cash dividend plan. Based on the total number of shares of 1,720,577,649 shares, a cash dividend of 1.27 yuan (tax included) will be distributed for every 10 shares, for a total proposed dividend of 218.513,400 yuan.
Deeply cultivate intelligent computing centers and comprehensively accelerate cabinet layout. As IDC's leading enterprise, the company has implemented a nationwide strategic layout. In 2010, it first laid out the Beijing-Tianjin-Hebei core node, planned about 130,000 cabinets at this node, and successfully obtained core basic resources such as land, energy consumption, and electricity. Subsequently, in 2019, four core nodes, including the Yangtze River Delta, the Greater Bay Area, the Cheng-Chongqing Economic Zone, and the Northwest China region, were successively laid out, and a total of about 160,000 cabinets were planned. In 2023, the Hainan Park continued to be laid out, and about 30,000 cabinets are planned to improve the cross-border layout.
Currently, the company has built seven AIDC intelligent computing infrastructure clusters in six major regions of the country, including Beijing-Tianjin-Hebei Langfang, Yangtze River Delta · Pinghu, Greater Bay Area · Foshan and Huizhou, Chengdu-Chongqing Economic Zone · Chongqing, Gansu · Lanzhou, and Hainan · Danzhou. In total, it is planned to have about 61 intelligent computing centers and 320,000 racks. It is mainly concentrated in satellite cities in first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, and has basically completed the national “integrated computing power center system” framework layout. By the end of the reporting period, the company had delivered 13 computing power centers and about 76,000 racks. In particular, it had delivered 5 computing power centers in the Beijing-Tianjin-Hebei Park, Yangtze River Delta Park, and Greater Bay Area Park. The total number and power of the cabinets continued to increase.
AIDC's business continues to break through, and construction of a new intelligent computing center has officially started. The company successfully expanded the AIDC business, deployed large-scale computing power modules, and took the lead in deployment in the Beijing-Tianjin-Hebei Park and Yangtze River Delta Park, creating the company's second growth curve. At present, plans for seven AIDC intelligent computing power infrastructure clusters have been completed, with 61 intelligent computing centers and a resource reserve of about 320,000 racks. At the same time, the company actively grasped AI development opportunities and increased capital and R&D investment in the field of intelligent computing. On March 11, the company officially held the commencement ceremony of the new intelligent computing center project in Area B of the Runze (Langfang) International Information Port. The B-1 and B-2 new intelligent computing centers are the intelligent computing power infrastructure independently designed by the company and adopted a next-generation integrated architecture. The total construction area of the project is about 220,000 square meters. It is planned to be officially completed and put into operation by the end of 2025. After all are put into operation, it can gather intelligent computing clusters of more than 100,000 cards. The project will become the largest single intelligent computing center project in the country, which can be highly complex and highly computational The required trillion-level model training provides a full range of service support and technical support. The project plan is adapted to the high power of a single cabinet, and uses energy saving and carbon reduction technology such as advanced liquid cooling systems. It has various technical advantages such as fast storage, high-speed networks, and a secure environment, and has strong resource scalability and advanced technology.
Investment advice: The company is leading the traditional IDC industry while deploying a new AIDC data center. We believe that in the future, the company will maintain a high level of growth over a long period of time. It is predicted that the company's 2024-2026 revenue will be 60.30/83.16/10.884 billion yuan, up 38.6%/37.9%/30.9% year on year, and the company's net profit to mother will be 22.80/33.49/ 4.328 billion yuan respectively, up 29.4%/46.9%/29.2% year on year, corresponding to EPS 1.33/1.95/2.52 yuan, PE 23.2/15.8/12.2, maintaining the “buy” rating.
Risk warning: The implementation of the Intelligent Computing Center fell short of expectations; market competition continued to intensify; accounts receivable were not collected in a timely manner.