9M23 profits increased steadily; end customer demand and shelving rate steadily increased 9M23's revenue was 1.115 billion yuan, up 1.99% over the same period last year; EBITDA was 780 million yuan, an increase of 5.78% over the same period last year; the net profit was 102 million yuan, an increase of 38.02% over the same period last year, mainly due to the gradual power-up of the data center cabinets that had been put into operation by the company, and the gradual release of production capacity and demand. In the long run, we believe that the promotion of "Digital China" policy and the development of new applications such as AIGC will continue to drive the demand of the IDC industry. Taking into account the impact of the progress of the new project, we estimate that the company's EBITDA for the year 23-25 will be 1.486 billion yuan respectively (previous value: 11.60 shock 13681,621 million). Taking into account the impact of the short-term shelving rate of new projects, the company is given a 23-year EV/EBITDA of 13 times (comparable company average: 15.69), corresponding to the target price of 27.64 yuan, maintaining the "buy" rating.
Complete the layout of the core area Since 2015, the company has built 35 data centers in the core hubs of Beijing, Tianjin, Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macau Greater Bay Area and the west. By the first half of 2023, the company's IT load has reached 371.1MW, and the data center operation scale has reached 35, which translates into about 74200 standard cabinets. Looking to the future, the company's performance growth mainly comes from: 1) the shelving rate of the stock data center that has been put into operation in the core area continues to increase with the release of customer demand; 2) China Unicom (Huailai) big data Industrial Park project, Hebei Langfang project and Shanghai Minhang and other new projects have been delivered to the shelves. In the long run, with the steady progress of the construction of digital China, IDC as an indispensable part of the new digital infrastructure, the supply and demand pattern of the industry is gradually improving, the company as a third-party data center supplier leader is expected to benefit for a long time.
A steady increase in gross profit margin; good control of various expenses
With the increase in end-customer demand, the shelving rate of the data center cabinets that the company has put into operation has gradually increased, generating operating income and improving profitability, and 9M23's comprehensive gross profit margin has increased by 1.52pct to 28.87% compared with the same period last year. In terms of expense rate, 9M23's sales / management / R & D / financial expense rate changed from year-on-year-0.05/0.12/0.33/-2.28pct to 0.22% 4.76% Accord 4.59% Universe 8.79%, sales, management and R & D expenses were well controlled, and financial expenses decreased significantly compared with the same period last year, mainly benefiting from the company's good capital expenditure control and expansion strategy. The company's profits are expected to release steadily with revenue.
Be optimistic about the long-term growth space and maintain the "buy" rating
We are optimistic that under the trend of increasing demand for new applications such as Digital China and AIGC, the company's EBITDA and profit growth momentum will continue. Taking into account the impact of the progress of the new project, the company's EBITDA for the year 23-25 is estimated to be 1.486 billion yuan respectively (previous value: 11.60 shock 13681,621 million).
The 23-year comparable company Wind unanimously expected the average EV/EBITDA to be 15.69 times. Considering the impact of the cabinet shelving rate of the short-term new project, the company was given 13 times the 23-year EV/EBITDA, corresponding to the target price of 27.64 yuan, maintaining the "buy" rating.
Risk hint: customer power-up progress is not as expected; project construction and delivery progress is not as expected.