Incident: The company released its 2023 annual report. In 2023, it achieved revenue of 4.35 billion yuan, an increase of 60.3% year on year; net profit to mother of 1.76 billion yuan, up 47% year on year; net profit after deducting non-return to mother of 17.01 billion yuan, an increase of 50.2% year on year. Among them, Q4 achieved revenue of 1.67 billion yuan in a single quarter, up 130.2% year on year and 67.3% month on month; net profit to mother of 640 million yuan, up 69.9% year on year, up 53.5% month on month; net profit after deducting non-return to mother of 590 million yuan, up 56.8% year on year and 41.1% month on month.
IDC's revenue continues to grow, and AIDC has become a new growth point. In 2023, the company's revenue was 4.35 billion yuan, up 60.3% year on year, and net profit to mother was 1.76 billion yuan, up 43% year on year, mainly due to increased revenue sources and AIDC business expansion. In terms of IDC's business, the listing rate of computing power centers delivered before 2023 increased steadily, and multi-park revenue was achieved in 2023; in the AIDC business, business development was smooth, and the scale of revenue continued to expand, gradually becoming the company's second growth pole. Up to now, the company has built 7 AIDC intelligent computing infrastructure clusters in 6 major regions of the country, including Beijing-Tianjin-Hebei Langfang, Yangtze River Delta · Pinghu, Greater Bay Area · Foshan and Huizhou, Chengdu and Chongqing Economic Zone · Chongqing, Gansu · Lanzhou, and Hainan · Danzhou, and has basically completed the national “integrated computing power center system” framework layout. A total of about 61 intelligent computing centers and 320,000 cabinets are planned nationwide.
Profitability has declined slightly, and fee bills are well controlled. The company's consolidated net interest rate in 2023 was 40.4%, down 8.4% year on year, but overall profitability is still at a high level. Cost-side control is good. In 2023, the company's sales/management/finance expense ratios were 0.1%/3.9%/2.9%, respectively, down 0.1/0.6/0.2pp year-on-year, respectively.
The data center industry has broad prospects and is expected to develop further. Digital transformation and artificial intelligence technology drive the continuous development of demand in the data center industry. According to the 2023 “Data Center Development Overview” of the Chinese Academy of Information and Communications Technology, China's data center industry's market revenue in 2022 was nearly 200 billion yuan, with an average compound annual growth rate of 30.69% in the past three years. The computing power ranking is second in the world, and the market space is vast. The company adheres to the “self-investment, self-construction, self-maintenance, self-operation and maintenance” model and is deeply tied to downstream operator customers. It has laid out park-level computing power centers in all six core regions and seven major computing power nodes across the country, and has basically completed the national “integrated computing power center system” framework layout, which is expected to develop further in the context of continuous growth in industry demand.
Profit forecasting and investment advice. EPS is expected to be 1.29 yuan, 1.67 yuan, and 2.25 yuan respectively in 2024-2026, corresponding to dynamic PE 23 times, 18 times, and 13 times, respectively. Net profit to mother will maintain a compound growth rate of 29.93% in 24-26. The company was given a valuation of 30 times in 2024, corresponding to a target price of 38.7 yuan. For the first time, coverage was given a “buy” rating.
Risk warning: Risks such as policy progress falling short of expectations, increased industry competition, project delivery falling short of expectations, asset restructuring performance promises or failure to meet standards.