Baoxin Software (600845): The service capability of the smart manufacturing industry continues to improve as expected
Investment Highlights Announcement Summary: The company released its 2019 Interim Report to achieve revenue of 26.
99 ppm, an increase of 11 years.
86%, net profit attributable to parent company4.
0.6 million yuan, an increase of 37 in ten years.
28%, net profit attributable to the parent company excluding non-recurring gains and losses.
850,000 yuan, an increase of 46 in ten years.
57%, realized net operating cash inflow4.
The performance was in line with expectations, and the proportion of software informatization core business increased, which improved the overall gross profit level.
The 2019H1 results are in line with our expectations, with higher gross profit margins, lower expense ratios, good cash flow, continuous optimization of operating efficiency, and new highs for the same period in history.
By business, software development and engineering services revenue was 17.
44 ppm, an increase of ten years8.
68%, service outsourcing (including IDC) revenue8.
89 ‰, an increase of 31 in ten years.
10%, system integration revenue is 0.
59 trillion, down 50 a year.
We estimate that IDC revenue will be about 6 billion, an annual increase of about 30%. The first three phases of Baozhiyun will be delivered and operated, and the fourth phase is being delivered one after another.
Revenue growth rate is lower than profit growth rate, mainly due to changes in business structure, information and automation core business has steadily increased, system integration and intelligent business with gross margin replacement have declined, gross profit margin for software development and engineering business in 2019H126.
10%, a substantial increase of 4 per year.
02 pct, 2019Q2 comprehensive gross profit margin is 34.
60%, an increase of 4 from the previous quarter.
With 38 pcts, the increase in gross profit margin was mainly due to changes in business structure.
From the perspective of expenses, the sales expense ratio for 2019H1 dropped by 0 year-on-year.
20 pct, the management expense rate drops by 0 every year.
44 pct, sufficient funds to achieve net interest income.
The company’s main market steel industry mergers and reorganizations continued to advance, and demand for smart manufacturing and construction increased.
The nationwide deployment of a new generation of information infrastructure business has officially started, and the listing rate has continued to rise.
Baowu Group continued to integrate acquisitions, and Baoxin Software became a leader in smart manufacturing.
After Baowu’s merger, it recently acquired Magang for the first time.
According to the data of the China Iron and Steel Association, the crude steel output of Baowu and Maanshan Iron and Steel Group in 2018 were 6,743 meters and 1964 meters, respectively, with a total of 8707 joints.The gap has further narrowed.
According to the Baowu Group’s capacity planning roadmap, a steel boutique and intelligent manufacturing service provider with a production capacity of nearly 100 million tons built in 2021 will be expected to become the world’s largest steel group.
Baoxin Software focuses on promoting the optimization and upgrading of manufacturing of iron and steel enterprises. It has the largest market share in the steel field in products and services such as MES, EMS, cold rolling, operation and maintenance services.
Cultivate seven key technologies of centralized control, intelligent equipment, big data, artificial intelligence, mobile IoT, industrial network security, and virtual manufacturing. Focus on conducting forward-looking research on 5G technology and make breakthroughs, supporting China Baowu’s release of a 120-ton unmanned frameworkVehicles, robots, remote real-time intervention, remote quality inspection, remote steelmaking and other world’s first 5G steel industry applications, focus on innovation and development of core competitiveness, and continuously improve the company’s overall manufacturing planning and industrial service capabilities of smart manufacturing, leading the industry’s technological progress.
The data center business is distributed to the national market.
The Shanghai Data 南宁桑拿 Center planning guidelines require that existing industrial areas outside the outer ring be selected in principle, with a single project size of 3000-5000 and a PUE of less than 1.
3. The number of new racks will be controlled at 60,000 by 2020.
The reporting entity has large-scale operation experience and long-term stable operation and service capabilities in Shanghai.
The fourth phase of the company’s Shanghai Baozhiyun IDC was gradually delivered as planned, and a total of 30,000 standard cabinets in the fourth phase will be successively transported and operated, forming an output value of about 2 billion.
Baoxin Wuhan area IDC central area is planned to be constructed in three phases1.
The 820,000 20A cabinet, when completed, can become the largest big data and cloud computing center in Central China.
In 2019/2021/2023, we plan to invest about 2,000 / 6,000 苏州桑拿网 / 10,000 standard cabinets.
Wuhan is the first step of the company’s IDC business out of Shanghai and into the country.
Core city data center customers have strong demand, but the indicators are strictly controlled. Core cities have sustainable and stable load conditions, land consumption costs, large-scale, and centralized data center location will become scarce resources.
We expect that the company will combine Baowu Group’s resource advantages and its own technology operation capabilities to conduct business expansion around Shanghai and other core cities.
Investment suggestion: Baoxin Software is a leader in steel informatization and a leading manufacturer of smart manufacturing to help China’s manufacturing industry transform and upgrade.
Break through the advantage of scarce resources of Baowu Group and its own informatization capabilities, rapidly develop IDC business, and become the leader of third-party data centers in East China and even the country.
We expect the company’s net profit for 2019-2021 to be 8.
5.1 billion / 11.
2.7 billion / 14.
2.4 billion, diluted EPS were 0.
75 yuan / 0.
99 yuan / 1.
25 yuan, maintain “Buy” investment rating.
Risk reminder: Risks of informatization investment construction in the steel industry exceed expected risks; risks of IDC delivery and listing progress gradually expected