2024H1, Runjian Co., Ltd.'s 2023 revenue was 4.424 billion yuan, down 3.7%; net profit to mother was 0.236 billion yuan, down 17.21%; net profit not attributable to mother was 0.229 billion yuan, down 18.38%. 2024Q2 achieved revenue of 2.285 billion yuan, a decrease of 0.66% and an increase of 6.85%; net profit to mother of 0.108 billion yuan, a decrease of 25.39% and a decrease of 14.94%; net profit not to mother of 0.103 billion yuan, a decrease of 27.72% and a decrease of 17.50%.

The communication network business grew steadily, and the energy network declined due to unconfirmed acceptance of some projects. 1) Communications network business: 2024H1, revenue of 2.077 billion yuan, up 0.85% from the same period, accounting for 46.95% of revenue. The company won bids for important projects in Guangdong, Jiangsu, Hubei and other provinces, and its leading position continues to be consolidated.

2) Energy network business: Revenue for the first half of the year was 0.7796 billion yuan, down 19.28%, accounting for 17.62%.

The total installed capacity of wind power, photovoltaic, and energy storage projects serviced and reserved by Runjian Co., Ltd. exceeds 15 GW, and has built, operated and maintained more than 20,000 charging stations for customers such as Tower Integrated Energy and China Southern Power Grid Electric Vehicle Service Co., Ltd. The comprehensive communication energy management business has implemented more than 350 projects in 23 provinces, and has the highest market share in the fields of communication photovoltaics and tower temperature control. The RunDobidder virtual power plant digital scheduling platform has an aggregation capacity of over 1 GW and 25,000+ monitoring points. It has implemented virtual power plant platform construction and operation services in Guangdong, Zhejiang, Anhui, Chongqing and other provinces and cities, respectively, and is in the first tier of the industry.

The information network business is gradually expanding, and the computing power network business continues to grow at a high rate. 1) Information network business: Revenue for the first half of the year was 1.341 billion yuan, down 4.08% from the same period, accounting for 30.32% of total revenue. Including data services and a “ruler” platform, we adhere to the business development strategy of “focusing on customers, focusing on channels, focusing on products, and replicating models”. In the first half of the year, the curve platform further strengthened functions such as industry model development, computing power scheduling and pooling, and AI data set management, and obtained a number of typical projects such as “a central enterprise knowledge management big model development”, “a provincial data sharing platform for an operator”, and “a national smart park for a large car company”. 2) Computing power network business: 2024H1, accounting for 5.09% of revenue (up 1.4pct year on year), and revenue also increased by 32.82%. In the Wuxiang Yungu Cloud Computing Center project, the Wuxiang Yungu Cloud Computing Center will build a benchmark cloud data industrial park that meets the national standard A and international T3 design standards. It is the highest level and largest cloud computing data center in Guangxi. Computing power management, operation and maintenance services have already been implemented in various supercomputing center projects, such as the National Supercomputing Shenzhen Center and an operator's largest single computing power center project in the world. At present, the company has reached cooperation with Internet vendors such as Alibaba Cloud and Baidu, vertical industries, and operator customers, etc., and has built a good cooperative ecosystem.

Increase research and development in the network and AI+ industries. 1) Computing power management operation and maintenance: An intelligent operation and maintenance joint innovation center was established, and an integrated intelligent operation and maintenance management platform was developed. It uses containers as the base, integrates cloud computing, big data, and AIOps capabilities, and transforms passive monitoring into active dialing. 2) Multi-modal industry model development service: The “curve ruler” platform can share the resources of the Wuxiang Yungu Intelligent Computing Center, focus on training artificial intelligence algorithms for vision, speech, and text, and introduce big model (LLM) and intelligent (AI agent) capabilities to further enhance the ability to build various software and hardware industry solutions. The company relies on a self-developed WEBGPU adaptation framework. The algorithms produced by the platform support mainstream mobile chips at home and abroad, and are suitable for various out-of-the-box scenarios. 3) Empowered by emerging technologies such as drones: The drone business covers 10+ regions and has cruised a total of 400,000 kilometers. Scenes include power grid inspection, photovoltaic and wind power inspection, photovoltaic cleaning, agricultural monitoring and investigation, urban management and public safety, and emergency management.

Continue to increase investment in overseas business and explore the ASEAN market based in Guangxi. Runjian Co., Ltd. has successively set up subsidiaries in countries and regions such as Germany, Hong Kong, Singapore, Indonesia, and the Philippines to develop overseas markets, especially in ASEAN countries. Overseas business focuses on computing power management and maintenance, digital products, new energy, etc., to export outstanding domestic products and experience. Currently, the business has covered 10 countries and regions, undertook 100+ local projects in the ASEAN region, and completed 7 data center or computing power center projects.

Profit forecast and investment advice: The company's total revenue is expected to be 9.52/11.347/13.421 billion yuan from 2024 to 2026, corresponding growth rate of 7.86%/19.20%/18.27%; net profit to mother is 0.508/0.709/0.931 billion yuan, up 15.73%/39.66%/31.38% year-on-year. The corresponding EPS is 1.81/2.52/3.32 yuan, corresponding to PE 20.71/14.83/11.29 times. Maintain a “Recommended” rating.

Risk warning: risk of major customer concentration, risk of communication business development falling short of expectations, market competition and technology development risk.