Key points of investment
The delay in confirming the project affected short-term performance, and there were sufficient orders in progress
In 2023, the company achieved revenue of 8.826 billion yuan, +8.17% year-on-year, and realized net profit of 439 million yuan, or +3.38% year-on-year. Gross margin was 17.92%, -1.17pct year over year. The overall performance on the cost side is stable, and the R&D cost rate has increased. By business, communication network operation and maintenance revenue was 4.561 billion yuan, +4.23% year over year, industry digital business revenue was 2.11 billion yuan, -12.6% year over year, cloud service and IDC service revenue was 308 million yuan, +36.54% year over year, and energy network management and maintenance revenue was 1,845 billion yuan, +61.71% year over year.
In 24Q1, the company's revenue was 2.139 billion yuan, -6.75% year on year, and net profit to mother was 127 million yuan, -8.71% year over year.
Mainly due to delays in revenue recognition for some projects, overall operations were steady, and on-hand orders increased by more than 30% year over year.
Increase investment in intelligent computing clouds and actively promote computing power centers to go overseas
The company has built a leading intelligent computing cloud service in China, which has gradually generated revenue and laid a good foundation for the implementation of the company's artificial intelligence business. At present, the company has reached cooperation with Internet vendors such as Alibaba Cloud and Baidu, vertical industries, and operator customers to build a good cooperative ecosystem. Furthermore, according to customer demand, the company continued to increase investment. The company's projects under construction at the end of 24Q1 amounted to 589 million yuan, an increase of 35% over the beginning of the period. In addition, the company signed a cooperation agreement with Nvidia's elite (Elite) partner Allianz in China to jointly build a China-ASEAN computing power server cluster and the China-ASEAN Five Elephant Cloud Valley AI Innovation and Empowerment Center to provide customers with intelligent computing cloud services, optimized computing power scheduling and operation and maintenance, artificial intelligence model development and application; the company plans to invest in the construction of a computing power center with partners in ASEAN to build cloud nodes and computing power nodes radiating ASEAN.
Computing power management and maintenance services have been implemented at various supercomputing centers such as the National Supercomputing Center in Shenzhen and the China-ASEAN Artificial Intelligence Supercomputing Center. They are committed to improving the operating efficiency of computing power centers, and have good replication and demonstration effects.
The energy network has maintained rapid growth and is actively promoting the communication energy management energy network business. The total installed capacity of the company's services and reserves of wind power, photovoltaic, and energy storage projects has exceeded 10 GW, providing high-standard intelligent operation and maintenance services for important customers such as China Resources, Huaneng, and South Grid Integrated Energy.
Inspection services such as drone power grids and photovoltaics have accumulated a total flight mileage of more than 300,000 kilometers, and a large amount of proprietary data has been accumulated, and the company has successively expanded innovative applications such as drone cleaning. The implementation of some large-scale new energy projects has been delayed, and the volume of business has fluctuated in stages.
Communications integrated energy management. The company has the highest market share in fields such as communication photovoltaics and tower temperature control, and is gradually evolving into distributed virtual power plants. The company signed a cooperation agreement with Huawei Digital Energy to cooperate in all aspects of intelligent computing centers, smart photovoltaics, and charging networks to jointly create full-life cycle solutions.
Communication networks are growing steadily, and AI empowers to improve efficiency
The communication network business has maintained steady growth. The company continues to promote AI empowerment, and has formed an intelligent management and maintenance model of “online digital platform+offline technical service” to improve business efficiency, continue to break through new regions and customers, and continuously increase its market share.
The information network continues to adjust its structure and launch a variety of AI applications
In the information network business, the company actively adjusts business strategies to focus on customers, regions and key products. We have made breakthroughs in business ecology and signed cooperation agreements with Baidu, Guangzhou Institute of Electronics of the Chinese Academy of Sciences, Dahua, etc., to actively promote the commercial application of AI models. In the AI application business, we rely on the “curve ruler” platform to continue to implement large AI model applications. Various business lines have been empowered internally, and in terms of external services, AI has been used to upgrade digital services, and typical applications such as government service robots and intelligent urban management assistants have been implemented.
Profit forecasting and valuation
The company's net profit for 2024-2026 is estimated to be 593 million yuan/680 million yuan/899 million yuan, corresponding to PE of 17X, 15X, and 11X in 24-26, maintaining a “buy” rating.
Risk warning
Carrier capital expenditure falls short of expectations; risk of gross margin falling short of expectations; risk of sales of own data centers falling short of expectations; development of computing power leasing business falls short of expectations, etc.