Incidents:
On August 26, 2023, the company released the 2023 semi-annual report. In the first half of 2023, the company achieved total operating income of 746 million yuan, an increase of 4.74% over the previous year; net profit not attributable to parent was 57 million yuan, an increase of 59.07% over the previous year.
The core area continues to be laid out and data center resources are continuously accumulated:
In the first half of 2023, thanks to the business needs of end customers and the gradual power up of data center cabinets already in operation, the company's revenue increased steadily. According to the announcement, in recent years, the company has set up “Eastern Digital” hubs in the Beijing-Tianjin-Hebei, Yangtze River Delta, Hong Kong-Guangdong-Macao Greater Bay Area, etc., and has laid out “Western calculation” nodes in Ulanqab, Inner Mongolia, etc., in line with the country's “East Numerical Count to West” strategy. On this basis, the company continuously expands and accumulates core urban data center resources through market mergers and acquisitions, etc., and accelerates exploration of the company's strategic resource reserves in first-tier core regions of China.
The scale of operations continues to expand, laying the foundation for growth:
As of the publication of the semi-annual report, the company's cumulative IT load reached 371.1 MW, which translates into about 74,000 5kW standard cabinets. According to the “China Third-Party Data Center Operator Analysis Report (2022)” published by the China Academy of Information and Communication Technology, the company jumped to second place in the industry due to its scale advantage.
The steady increase in operating scale is expected to continue to contribute stable cash flow to the company.
Responding to green and low carbon, PUE leads the industry:
As a data center enterprise for emerging high-energy industries, the company responded positively to the “Implementation Plan for Implementing the Carbon Peak Carbon Neutrality Target Requirements and Promoting the Green and High-Quality Development of New Infrastructure such as Data Centers and 5G” jointly issued by the four ministries and commissions of the country. According to the company's official website, the company's national operating data center PUE has reached an international leading level of 1.22 and a minimum of 1.09, which is far superior to the domestic industry average. To achieve the goal, the company has actively explored practical applications in immersion liquid cooling, photovoltaic power generation, and waste heat recovery. Relevant technologies can help reduce energy consumption and carbon emissions throughout the life cycle of data centers, achieve efficient access to clean energy, and solve IDC's site selection difficulties.
Investment advice:
As a leader in the IDC industry, the company continues to lay out IDC resources in first-tier core regions in China. Project reserves are rich, core assets are of high quality, and future performance is expected to continue to improve. We expect the company's revenue from 2023 to 2025 to be 15.58/17.45/1,937 billion yuan, net profit of 1.57/193/195 million yuan respectively, corresponding to EPS of 0.34/0.42/0.42 yuan. It is given 75 times PE in 2023, corresponding to a target price of 25.50 yuan, and an investment rating of -A for increasing holdings.
Risk warning: risk of high customer concentration, risk of increased industry competition, risk of industrial policy change, risk of project construction and delivery falling short of expectations