Inspur Information (000977): 20 years of high profit growth, industry demand recovery trend is obvious

Inspur Information (000977杭州夜生活网): 20 years of high profit growth, industry demand recovery trend is obvious

Event: On January 16, 2020, the company issued a 2019 performance forecast, and the report is expected to achieve net profit attributable to mother 8.

56-9.

880,000 yuan, an increase of 30-50% in ten years; net profit after deduction of 7.

29-8.

610,000 yuan, an increase of 18 in ten years.

86% -40.

34%.

  The performance exceeded expectations and market share continued to rise.

The company realized profit in 20198.

56-9.

88 billion (+ 30% -50%), which outperformed market expectations; of which approximately 1.

2.7 billion non-recurring gains and losses, net profit after deduction7.

29-8.

6.1 billion (+18.

86% -40.

34%).

If measured by the median, Q4 single-quarter net profit increased by 40.

2%, slightly higher than 39 in the first three quarters.

4%.

Against the backdrop of continued downward demand for the domestic server industry in 2019, the company is still able to achieve a profit growth of 30% -50%. The company’s domestic server market share in the third quarter of 2019 has reached 33.

1%, reaching the historically optimal level.

We believe that the company has both brand and white card advantages, and is optimistic about the future increase in share and profitability under the future domestic cloudization trend.

  Driven by Internet + operators, the domestic server industry is likely to usher in an inflection point in 2020.

1) After several consecutive quarters of inventory digestion in the domestic Internet market, the recovery trend has gradually shown since 2019H2. Ali and Tencent’s Q3 capital expenditures have increased by 50% from the previous quarter.In the new year, the number of orders will gradually decline; 2) The three major operators recently announced the public cloud strategic plan one after another. After the operator market has experienced a small number of server collections in 2019, it is likely to usher in another year of demand in 2020.

We believe that both the Internet and the operator market will usher in a turning point in demand, and Inspur is expected to be the biggest beneficiary of the recovery in industry demand.

  The rights issue was approved, and the cash flow pressure in 2020 was further eased.

On January 16, the company’s share placement plan was officially approved, and the company’s cash flow will be better improved after it is officially launched.

In 2019, the company accelerated the upstream and downstream payments, and the first three quarters of operating cash flow was -37.

800 million, ranking -82 in the same period last year.

$ 400 billion improvement; financial rates have gone from zero accordingly.

96% phospholipids to 0.

64%.

We believe that the placement of shares will further reduce the pressure on funding, and financial rates are expected to decrease.

  Profit forecast: It is estimated that from 2019 to 2021, the company’s operating income will be 540/722/912 trillion, and its net profit will be 8.

7/13.

7/19.

9 trillion, corresponding to 0 EPS.

68/1.06/1.

55 yuan; maintain “Buy” rating.

  Risk warning: CSP manufacturers’ capital expenditures are recovering less than expected, and they are overly optimistic about the expansion and adjustment of competitive layout.