Inspur Information (000977)： Enjoying Industry Growth Dividend, Server Gross Margin Stabilizes and Rise
Inspur Information (000977): Enjoying Industry Growth Dividend, Server Gross Margin Stabilizes and Rise
Event: The company released its 2018 annual report and achieved operating income of 469.
41 trillion, an increase of 84 in ten years.
17%, achieving net profit attributable to shareholders of listed companies.
5.9 billion, an increase of 54 in ten years.
05%, the deducted non-net profit attributable to shareholders of the listed company is 6.
13 ppm, an increase of 83 in ten years.
Meet market expectations.
The JDM model and scale advantages enjoy the global industry growth dividend, and the server business gross profit margin stabilizes and rises.
1) According to Gartner data, through the advent of IT generations in industries such as AI, the Internet, 5G, edge computing, and enterprise cloud, the global x86 server market in 2018 was strong, with investment and input volumes hitting record highs, with server input of 1290.
40,000 units, tellurium is 705.
3 billion US dollars, an increase of 13 each year.
2% and 34.
The company’s JDM model and large-scale advantages are obvious, and it can quickly respond to the expansion needs of downstream customers (especially Internet companies). In 2018, the company’s x86 server throughput and parity ranked first in the world, China ranked first, and its growth rate ranked first.
The company fully benefited from the global industry growth dividends, and its operating income in 2018 reached 469.
41 trillion, an increase of 84 in ten years.
2) The gross profit margin of the server business reached 10.
93%, 0 higher than the same period last year.
53 levels, verifying that the server’s gross profit margin has stabilized and rebounded.
The reason is expected to be: the industry’s price war is slowing down, the company’s rapid increase in market share has generated scale effects, and the proportion of AI servers with high gross profit margins has increased.
Cash flow from operating activities improved significantly, and the three fees during the business investment period increased rapidly.
1) Net cash flow from operating activities in the period.
30 ppm, an increase of 422 in ten years.
02%, indicating that the sales rebate of the server improved.
2) Selling expenses for the current period12.
29 ppm, an increase of 54 in ten years.
80%, mainly due to the expansion of business scale, sales staff costs and marketing expenses increased.
3) Management expenses in this period 5.
77 ppm, an increase of 112 in ten years.
34%, mainly due to the increase in the number of managers, budget 杭州夜生活网 costs, and management system information construction costs.
Among them, in September 2018, the company granted 37.96 million stock returns to the company’s 136 senior management personnel, core technical personnel and other incentive objects, and the exercise price of stock options was 17.
4) Financial expenses for the current period 4.
24 ppm, an increase of 95 in ten years.
34%, mainly due to supplementary debt financing and supplementary working capital.
R & D investment has been made, and IBM has accumulated a multi-architecture technology foundation.1) R & D expenses in this period 18.
9.4 billion, an annual increase of 76.
16%, mainly due to the increase in the number of new product developments and the increase in R & D personnel.
2) In 2018, the company made breakthroughs in the research and development of key diamond products and key technologies.
3) In September 2017, the company and IBM established a joint venture to jointly develop Power architecture servers, and actively build Power series products based on the advantages of both parties, to develop and develop ecology, and to promote the company’s business gross margin.
Given a target market value of 412 trillion in 2020, maintain a “Buy” rating.
Based on key assumptions and the 2018 annual report, it is estimated that the operating income for 2019-2021 will be 600.
04 billion, 749.
8 billion and 922.
2.0 billion (Before adjustment, it is estimated that the operating income for 2019-2020 will be 552.
9.5 billion and 690.
9.3 billion), it is estimated that the net profit attributable to mothers in 2019-2021 will be 7.
9.4 billion, 12.
1.2 billion and 15.
2.2 billion (before adjustment, the net profit attributable to mothers for 2019-2020 is 9).
2.2 billion and 13.
CAGR for the next three years is 38%, according to PEG = 0.
9 It is estimated that the target market value for 2020 is 4.12 million yuan, corresponding to PE 34x.
Maintain “Buy” rating.
Risk reminders: growing demand in downstream industries; increased competition in the server industry; escalating trade frictions; and risk of bad debts.