This topic analyzes the progress of Inspur Information's construction on the server channel side from the perspective of Inspur Information's AI server sales channel. We believe that Inspur Information continues to expand sales channels and upgrade sales models. The company's current integrated software and hardware channel ecosystem protects AI server-related businesses and is the biggest moat in the company's business model.
As a leading domestic server brand manufacturer, the company's product sales channels are mature and stable. Inspur Information's sales system follows 2B hardware product channel practices to establish value sales channels. The sales models are divided into two types: direct sales and distribution. Among them, the direct sales model is mainly aimed at NA customers in the industry; the distribution channels are mainly the company's distributors and agents in each province and region, which are responsible for sales operations within the provinces and regions where they are located.
Build value-added channels and establish a 2B sales system integrating software and hardware. The company's traditional direct sales+agent distribution sales model faces development bottlenecks and is unable to adapt to the development and changes of the server market. For example, distribution channels cannot provide customers with scenario solutions, and customer service value cannot be achieved, resulting in low stickiness. In 2017, the company began building value-added channels. The specific measures are to cooperate with independent software developers and system integrators to explore new applications of new industries, expand regional non-financial markets, and create software and hardware solutions for the industry.
Since the expansion of value-added channels, the company has more than 2,000 industry partners, covering more than 90 of the top 100 solution companies, and has become an important part of the company's sales system.
With the AI server Dongfeng, the value-added channel was upgraded to a meta-brain ecosystem. In 2017-2019, the company's software and hardware integrated 2B sales system was at the 1.0 stage. The company had problems such as “supporting” partnerships with software vendors and unclear benefit-sharing rules. After the advent of the AI era, in April 2019, the company officially launched “Meta Brain” (Meta Brain) at the IPF2019 conference. It collaborated with left-handed partners with AI technology development capabilities and right-handed partners in distribution channels to jointly provide the industry with end-to-end Al solutions. The AI era has established practical scenarios for companies to cooperate with software developers, and a large number of incremental customers in the market are paying more attention to artificial intelligence. The company launched “Yuanbrain Ecosystem”, marking the formation of the company's software and hardware integrated 2B sales system and entering the 2.0 era of rapid development.
Regional channels mainly target small and medium-sized customers. The business mainly comes from distribution and value-added channels, and the gross margin of server product sales is relatively high. From 2021 to 2023, the gross margin of the regional model was 6.17-8.92% higher than the overall gross margin. From 2020 to 2023, benefiting from the Yuaneng ecosystem, the company's regional channel revenue maintained steady growth. From 2020 to 2023, the company's regional distribution model revenue increased from 10.54 billion yuan to 16.26 billion yuan, and its share of the company's total revenue increased from 16.72% to 24.69%. In April 2024, the company fully upgraded Yuanbrain to an intelligent computing brand that includes all computing products. We believe that a meta-brain ecosystem based on an integrated software and hardware sales system has taken shape, which is the company's huge leading advantage over its competitors under the sales system. It is expected to help the company maintain rapid growth in the regional model business scale and drive a steady increase in the company's overall gross margin.
Company profit forecast and investment rating: Benefiting from major trends in the global AI industry, we expect the company's 2024-2026 revenue to be 72,493 billion yuan, 833.77 billion yuan, 95.898 billion yuan, and net profit to mother of 2,068 billion yuan, 2,667 billion yuan, and 3.391 billion yuan respectively. Corresponding PE is 27, 21, and 16 times, respectively, maintaining the “recommended” rating.
Risk warning: AI server sales fall short of expectations, high dependence on core device vendors, decline in the domestic real economy, etc.