Inspur Information (000977) Semi-annual Report Comment: Operational Efficiency Improves Profits Exceeds Expectations, Benefits 5G and Competition Optimization
Event: The company released its semi-annual report for 2019 and achieved operating income of 215.
41 ppm, an increase of 12 in ten years.
46%; Net profit attributable to shareholders of listed companies.
730,000 yuan, an increase of 39 in ten years.
47%; net profit attributable to shareholders of listed companies in place of non-recurring gains and losses2.
410,000 yuan, an increase of 32 in ten years.
42%; basic income is 0.
Net cash flow from operating activities was -29.
28 ppm, -70 in the same period last year.
Comments: Q2 revenue growth bottomed out, benefiting from the 5G wave in the long-term and the optimization of the competitive landscape in the first half of the year, the company’s revenue growth rate increased significantly, Q2 single quarter revenue growth rate was only 2.
6%, mainly due to the decline in the growth rate of Internet giants ‘capital expansion.
From the perspective of the industry, global cloud computing demand has begun to 四川耍耍网 pick up, and domestic demand is expected to recover in the second half of the year. 5G edge computing will have a medium-term positive effect on server demand.
In addition, due to the trade friction between China and the United States, the business of some of its friends has shrunk, and the company’s competitive landscape has been optimized at the same time.
We believe that Q2 growth has bottomed out and will improve in the second half of the year.
Expenses are still growing fast, laying the foundation for medium-term growth. In the first half of the year, the company’s selling expenses increased for ten years.
2%, we expect to be mainly related to increasing investment in overseas markets; management costs increase by 34 each year.
0%, the increase in budget costs is an important influencing factor; research and development costs increase by 39 each year.
3%, mainly because the company increased research and development of new products.
The overseas market is an important growth point for the company in the future. Equity incentives can enhance the company’s combat effectiveness. The continuous introduction of new products is the key to improving profit margins. We believe that the rapid growth of expenses lays the foundation for medium-term growth.
The increase in operating efficiency has resulted in a faster-than-expected increase in net profit. The net interest rate has gradually increased and the inflection point has increased. At the same time, the expense has increased. Revenue growth has brought pressure on profits.Early growth led to a net interest rate increase of 0 compared to last year’s intermediate report.
We believe that the improvement in the margins of financial expenses and impairment losses lies in the improvement of the company’s operating efficiency, the decline in short-term capital, and the improvement in the management of inventory and receivables.
Beginning this year, the company entered a period of rising net interest rates.
Profit forecast: We are optimistic that the company will continue to benefit from the growth in demand brought by 5G, and maintain our profit forecast. It is expected that the company will achieve net profit in 2019/2020/20219.
38 trillion, corresponding to 0 EPS.
27 yuan / share, maintain “Buy” rating.
Risk warning: downstream demand is less than expected; overseas expansion is blocked; industry competition is intensifying.