Description of the event
On April 17, 2024, the company released its 2023 annual report: during the reporting period, the company achieved revenue of 4.351 billion yuan, +60.3% year over year; realized net profit to mother of 1,762 billion yuan, +47.0% year on year; realized deducted non-net profit of 1,709 billion yuan, +50.2% year on year.
Incident comments
Entering a new stage of multi-park revenue contribution, AIDC successfully expanded and injected new impetus. In 2023, we have officially entered a new stage of contributing revenue from one park to multiple parks. Five new computing power centers were delivered, and about 30,000 new cabinets were added, of which the Beijing-Tianjin-Hebei Park contributed 3 buildings, and the Yangtze River Delta and Greater Bay Area parks each contributed 1. By the end of 2023, the company had delivered a total of 13 computing power centers, with a total number of about 76,000 cabinets, an increase of 65.22% over the end of 2022. The shelf rate of mature computing power center cabinets exceeded 90%. Furthermore, the company successfully expanded the AIDC business in 2023, leading the deployment of large-scale computing power modules in the Beijing-Tianjin-Hebei Park and Yangtze River Delta Park to create a second growth curve for the company's development and inject new growth impetus into the company.
The incremental project lays out new resources, and the existing projects expand new energy consumption. An incremental project. In 2023, the company deployed new resources and landed in Danzhou, Hainan to improve the cross-border layout and plan about 30,000 racks. Existing projects. As the first phase of overseas projects is completed and delivered, important basic resources such as land and energy consumption have also been added to the second phase of the project in many places. At the end of 2023, the company's energy consumption index reserves increased by 37.65% compared to the end of 2022, effectively guaranteeing the company's long-term steady development. Electricity supply. The Beijing-Tianjin-Hebei Park successfully put into operation a self-built high-grade 220KV substation in January 2024. Its maximum power supply capacity reached 960 MW, which more than tripled the power supply capacity of the Beijing-Tianjin-Hebei Park and provided sufficient space for customers to expand electricity capacity on a large scale.
AIDC is progressing smoothly, and the proportion of high-power cabinets is expected to increase steadily. The company achieved revenue of 1,199 billion dollars in the AIDC business in 2023, mainly including the liquid-cooled computer room and intelligent computing business. It is progressing smoothly as the company's new business: 1) The company delivered the industry's first complete pure liquid-cooled intelligent computing center in 2023, and has accumulated rich experience in the design, R&D, construction, operation and maintenance of liquid-cooled intelligent computing centers; 2) At the same time, the company actively grasped AI development opportunities and actively increased capital investment and R&D investment in the field of intelligent computing. It led the deployment of large-scale computing power modules in the Beijing-Tianjin-Hebei Park and Yangtze River Delta Park. In addition, the explosion of AI applications is driving rapid growth in computing power demand, and the sharp increase in AI server power consumption is directly driving the increase in the power density of single cabinets. Judging from the current power structure of the cabinets delivered by the company, in 2023, the entire pure liquid-cooled intelligent computing center and high-density air cooling data center where the company delivered power for a single cabinet were all high-power cabinets. At the same time, the company is gradually upgrading low-power cabinets in the Langfang Park. We believe that the share of high-power cabinets in the company's business structure is expected to gradually increase.
Investment advice and profit forecast: Compared with traditional IDC vendors, the company has embarked on a differentiated path and continues to focus on high-power cabinets and AIDC businesses. Looking ahead, we think the main opportunities for the IDC industry come from two aspects: 1) high-power cabinets will generate structural shortages of supply; increased AI server shipments will increase demand for high-power cabinets. Currently, there is less supply of high-power cabinets on the market; 2) the application-side explosion will drive the increase in demand for high-quality data centers around core first-tier cities even more obvious. At the same time, the company has a leading layout in AIDC and has won the trust of large terminal model customers with excellent technical strength, and the AIDC business is expected to become the second growth curve for the company's development. We expect the company's net profit to be 21.8/33.1 billion yuan in 2024/2025/2026, up 24%/51%/20% year over year, corresponding PE is 22/15/12 times, maintaining a “buy” rating and continuing to focus on recommendations.
Risk warning
1. The risk that the listing rate falls short of expectations;
2. The risk that performance promises cannot be fulfilled.