Description of the event
On April 26, 2024, the company released its 2024 quarterly report: during the reporting period, the company achieved revenue of 1,242 billion yuan, +53.7% year over year; realized net profit of 474 million yuan, +43.8% year on year; realized deducted non-net profit of 471 million yuan, +45.5% year over year.
Incident comments
IDC and AIDC's business progressed steadily, and revenue performance increased significantly year over year. 23Q1 achieved revenue of 1,242 billion yuan, +53.7% year over month, and -25.6% month on month; realized net profit to mother of 474 million yuan, +43.8% year on year, -26.1% month on month. The company's revenue increased significantly, mainly due to the steady progress of IDC's business in the current period and the smooth expansion of AIDC related business. The gross profit margin for 23Q1 was 47.3%, -6.6pct year over year, and +1.2pct month-on-month. Since the gross margin of the company's AIDC related business was lower than that of traditional IDC business, there was a significant year-on-year decline, but the month-on-month increase was significant, indicating that the profitability of the company's AIDC business has improved. The net interest rate was 38.3%, -2.6 pct year on year, and the company's expense control was good. The management/R&D expense ratio decreased by 2.0 pct/0.7 pct year on year. Affected by the increase in cost interest, the company's financial expense ratio was +1.3 pct to 3.7% year on year.
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. In addition, the company's 24Q1 inventory increased to 2.41 billion yuan, +212.99% year-on-year. The company purchased high-performance servers on a large scale, and the AIDC business expanded smoothly.
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.
Investment suggestions and profit forecast: The company's 24Q1 IDC and AIDC business progressed steadily, with a significant year-on-year increase in revenue performance. Looking ahead, opportunities in the traditional IDC industry come from two aspects: 1) High-power cabinets will be in structural short supply, and increased AI server shipments will increase demand for high-power cabinets, so IDC suppliers that are bound to leading Internet vendors and have high-power cabinet resources have obvious advantages; 2) The application-side explosion will drive the increase in demand for high-quality data centers in core first-tier cities even more obvious. The AI wave has directly brought about changes in industry demand, and the definition of data center technology requirements has changed from end users to upstream hardware manufacturers. The company's net profit for 24/25/26 is estimated to be 21.8/33.1 billion yuan, up 24%/51%/20% year over year, corresponding PE is 24/16/13 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.