Incident: Inspur Information released its 2024 semi-annual report on the evening of August 23. 2024H1 achieved revenue of 42.064 billion yuan, up 68.71% year on year; realized net profit of 0.597 billion yuan, up 90.56% year on year; realized deducted non-net profit of 0.422 billion yuan, compared to -1.17 million yuan for the same period last year.
The 24Q2 revenue growth exceeded expectations, confirming once again that the industry is booming. Looking specifically at 24Q2, the company achieved revenue of 24.457 billion yuan in a single quarter, an increase of 58.49% over the previous year. The overall 24H1 revenue growth rate of 68.71% was a further increase compared to the guidance of 60% or more during the performance forecast period, showing the boom in computing power construction for downstream customers. At the same time, it can be seen that as of 24H1, the company's contract debt account was 7.725 billion yuan, a sharp increase of 339% over the previous year, indicating that the company has sufficient orders in hand.
Gross margin declined in the short term due to the customer structure, and the level of account management improved dramatically. The company's 24Q2 gross margin for a single quarter was 7.5%, down from historical performance. We believe it is mainly related to changes in customer structure. Cloud vendors, represented by major Internet companies, will reduce the overall gross margin level to a certain extent, but considering the sharp increase in overall demand, the company's absolute gross profit growth rate is still impressive. At the same time, the company's 24H1 accounts receivable turnover was 48.62 days, a significant improvement compared to 84.60 days in the same period last year, showing the company's continuous improvement in term management capabilities.
If impairment effects are taken into account, 24Q2 profit elasticity may be undervalued. According to calculations, the company achieved net profit of 0.29 billion yuan to mother in a single quarter of 24Q2, an increase of 153% over the previous year; realized deduction of 0.18 billion yuan in non-net profit, compared to -0.16 billion yuan in the same period last year. Considering that high downstream demand has triggered the company's large-scale delivery and preparation of goods, leading to a sharp increase in the company's accounts receivable and inventory accounts, it is necessary to calculate a large amount of impairment preparation. Taking 24Q2 as an example, the company separately accrued asset impairment losses and credit impairment losses of 0.201 and 0.114 billion yuan, which had a certain impact on apparent net profit. If impairment losses are added back, the company's actual profitability may be underestimated.
The leading server position is stable and fully embraces the AI wave. According to the latest data released by Gartner and IDC, the company's server and storage product market share continues to be at the top of the world: in the first quarter of 2024, second in the world, number one in China; in the first quarter of 2024, the world's top three installed storage capacity and number one in China; in 2023, liquid-cooled servers ranked first in China; and in 2023, edge servers ranked first in China.
Investment advice: The company's net profit for 24-26 is estimated to be 2.475, 2.911, and 3.445 billion yuan, respectively, and the current market value corresponding to 24/25/26 is 19/16/14 times, respectively. Considering that AI computing power investment is expected to remain high, and the company's leading position in the server sector is remarkable, we believe that the current valuation of the company is low and maintains a “recommended” rating.
Risk warning: supply chain risk; core technology upgrade falls short of expectations; policy progress falls short of expectations