China and Jiangxi Communications, the “first stock in computing power infrastructure,” is currently booming in market subscriptions. This not only highlights the Hong Kong capital market's high recognition of the computing power infrastructure industry, but is also related to the company's continued sharp rise in Hong Kong stock IPOs in the same industry.
The Hong Kong capital market is very enthusiastic about the computing power infrastructure industry where the company is located. As the strongest outlet this year, market sentiment has been rising. The Hong Kong stock IPOs in the same industry, Jingwei Tiandi and Hong Kong stocks surged to +164% on the first day of listing. Jingwei Tiandi has now accumulated a cumulative increase of more than +210%, and the biggest blue chip China Communications Services Hong Kong stock IPOs in the same industry are oversubscribed more than 300 times, soaring +85% on the first day of listing and over +370% on the first day of listing!
We are entering the fourth industrial revolution. The foundation is large computing power. Big computing power has brought continuous prosperity to the big communications industry. Since 2021, the performance of Hong Kong stocks, the main customer of China and Jiangxi Communications, has continued to improve in the past three years. China Mobile's cumulative increase has exceeded +90%, China Telecom has increased by more than +140%, and China Unicom has increased by more than +50%. The industry is in a continuous cycle of rapid development and rise!
As a long-term partner of state-owned enterprises, China and Jiangxi Communications pay great attention to market reputation. Against the backdrop of high growth where the company's performance and revenue reached record highs in 2023 and profits almost doubled, the company still chose an undervalued issuance model, reserving the water level for the market ahead of time. This time, the maximum PE issued by the company was only 10 times, which is the lowest PE among the five new stocks currently issued. Judging from the issuance valuation, established stores Gold 14PE, Zhonggan Communications 10PE, Yuansu Technology 14PE, Tick Chuxing PE18 and Tianjudihe109PE. The undervalued issuance guarantees the potential for long-term capital market development .
In the wave of the information age, computing power has jumped to become the core evaluation index for a country's comprehensive strength. According to research by the China Academy of Information and Communication Technology, there is a significant positive correlation between computing power investment and economic efficiency. Every 1 yuan of computing power invested can drive an economic output of 3 to 4 yuan. This data not only reveals the huge role of computing power in driving economic and social development, but also indicates that computing power will become a new engine in the digital economy era.
In recent years, the Chinese government's emphasis on computing power infrastructure has continued to increase. The extensive layout and application of computing power infrastructure has not only provided strong support for the transformation of China's digital society, but has also accelerated the share of the digital economy in the national economy. In this context, with its unique position in the industry, strong technical strength and steady business model, Sino-Jiangxi Communications is facing unprecedented development opportunities.
The business grew rapidly, and revenue and net profit reached record highs
China-Jiangxi Communications, an enterprise focusing on the construction and operation of telecom infrastructure and digital solutions, has established long-term and stable business relationships with major players in the Chinese telecommunications industry since its establishment. These partners include the top three domestic telecom operators and the world's largest telecom tower infrastructure service provider. Through close cooperation with these partners, Sino-Jiangxi Communications has not only accumulated rich industry experience, but also formed a unique competitive advantage. Computing power is a new type of productivity integrating information computing power, network carrying power, and data storage power. It mainly provides services to the community through computing power infrastructure. The company's telecommunications infrastructure services are the core of the carrying capacity of the computing power network.
Sino-Jiangxi Communications also excelled in terms of performance. According to its prospectus, the company's revenue jumped to 609 million yuan in 2023, a year-on-year increase of 47.50%. What is even more remarkable is that during the year, profit reached 68.67 million yuan, an increase of 96.26% over the previous year, and almost doubled. In terms of profitability, the company also showed a steady growth trend, with gross margin rising from 19.0% in 2021 to 24.5% in 2023.
In particular, it is worth mentioning that the digital solutions business of Sino-Jiangxi Communications has risen rapidly in just a few years, and gross margin has risen to 69.6% year by year. As a new business launched in 2022, it is highly collaborative with the telecommunications technology facility business to jointly drive the rapid growth of the company's performance. Among them, the company's software solution service performance was particularly outstanding, with a gross margin of 93.5% in 2023. This diversified business structure not only met the diverse needs of customers, but also significantly increased the company's gross profit margin, further consolidating the leading position of Sino-Jiangxi Communications in the industry.
In addition to excellent business capabilities and profitability, Sino-Jiangxi Communications also has a huge reserve of unfinished contract projects. By the end of 2023, the scale of the company's unfinished contract projects had reached 820 million yuan, which surpassed the annual revenue. This impressive reserve not only lays a solid foundation for the company's continued growth in the future, but also indicates a high degree of certainty in the company's medium- to long-term performance growth after listing, thereby effectively reducing investment risks.
Core strategy leads, industry demand is booming
Currently, speeding up the construction of computing power infrastructure has become an inevitable choice of the times. It can be said that computing power infrastructure, as a core component of new infrastructure, is of great significance in supporting China's digital economy. On the one hand, through the deep application of emerging technologies such as the Internet, big data, and artificial intelligence, computing power infrastructure supports the transformation and upgrading of traditional infrastructure to form integrated infrastructure; on the other hand, through continuous support for scientific research, technology development, and product development, computing power infrastructure supports the implementation, construction, and innovative development of innovative infrastructure.
China's computing power infrastructure mainly includes supercomputing centers, intelligent computing centers, data centers, and four types of “urban brains,” all of which are under simultaneous construction. Currently, the country is speeding up the construction of a computing power industry ecosystem, and has collected more than 5,000 innovative projects for computing power applications, covering various fields such as finance, transportation, and urban governance.
Since this year, China has been steadily promoting the construction of computing power infrastructure, continuously strengthening industrial innovation capabilities, and continuously promoting the implementation of computing power applications to achieve positive results. According to the latest statistics, by the end of May, the number of intelligent computing centers with high-performance computer clusters planned nationwide had reached more than 10.
Driven by both policy trends and market demand, the telecom infrastructure service market is showing huge potential for growth. In order to optimize the layout of computing power infrastructure, the country has formulated and implemented a number of policies aimed at accelerating the construction of artificial intelligence computing architectures and software ecosystems and promoting breakthroughs in iconic technology products and solutions. Since the implementation of the “14th Five-Year Plan”, various departments in China have intensively introduced a series of policies, such as the “Overall Layout Plan for the Construction of Digital China” issued by the State Council in 2022 and the “Key Work Points for the Digital Economy 2024” this year. These policies have not only provided solid policy support for the development of the digital economy and computing power infrastructure, but also created a broad market space for leading enterprises such as China-Jiangxi Communications.
In particular, the “Action Plan for the High-Quality Development of Computing Power Infrastructure” jointly issued by six departments including the Ministry of Industry and Information Technology clearly states that by 2025, the country will significantly expand the scale of computing power, increase the share of intelligent computing power, and promote balanced and coordinated development of computing power in the east and west. The implementation of these policies will undoubtedly accelerate the pace of construction of China's computing power infrastructure and promote the vigorous development of related industries. As a leader in the industry, Sino-Jiangxi Communications will surely benefit from the trend of policies and achieve more rapid development.
Combined with the rapid growth performance of Sino-Jiangxi Communications and the strong trends in the industry in which it is located, there is huge room for future development of Sino-Jiangxi Communications. With its unique position in the industry, strong technical strength and sound business model, Sino-Jiangxi Communications has significant advantages in the field of digital economy and computing power infrastructure. With the deepening of the national strategy and the continuous growth of market demand, Sino-Jiangxi Communications will usher in broader development prospects.