Inspur Information (000977) Review of 2019 Third Quarterly Report: Revenue Growth Picks Up for Edge Computing Business, Internationalization Process Accelerates
The event company released the third quarter report of 2019. In the first three quarters of 2019, the company achieved operating income of 382.
30 ppm, an increase of 13 in ten years.
79%, realized net profit attributable to mother 5.
180,000 yuan, an increase of 39 in ten years.
09%, realizing net profit deduction for non-attribution4.
690,000 yuan, an increase of 37 in ten years.
Key investment points: Revenue growth is picking up, edge computing business is accelerating, and internationalization is accelerating. Single-quarter growth has begun to rebound.
In Q3 2019, the company’s operating income was 166.
90 ppm, an increase of 15 in ten years.
57%, net profit attributable to mother 2.
44 ppm, an increase of 38 in ten years.
66%, deducting non-attributed mother’s profit2.
28 ppm, an increase of 43 in ten years.
The growth rate of revenue in the third quarter was significantly higher than that in the second quarter, and net profit attributable to mothers and net profit attributable to non-mother mothers also increased significantly.
With reference to the three quarterly reports disclosed by the data, Intel’s DCG business revenue has returned to growth after undergoing two consecutive twisted jealous initializations (up 4% year-on-year), which indicates that the capital expenditure of downstream cloud computing centers has resumed growth and server purchases will bottom out and rebound.
Therefore, combined with the three quarterly reports disclosed by the company, the company’s revenue growth rate is expected to gradually rebound since the third quarter.
The gross profit margin increased and the expense ratio rose slightly during the period.
1) In the first three quarters of 2019, the company’s comprehensive gross profit margin was 11.
15%, a year to raise 0.
29pct, single quarter in the third quarter, the company’s comprehensive gross profit margin was 10.
28%, down 1 from the second quarter.
It is expected that the fluctuation in gross profit margin will be caused by changes in the prices of upstream devices and fall within a reasonable interval; 2) During the first three quarters of 2019, the company’s period expenses will be 8.
87%, increasing by 0 every year.
46 pct, of which the sales expense ratio increased by 0.
33 pct, the management expense ratio is increased by 0.
32 pct, R & D expense ratio increased by 0.
12pct, the financial expense ratio decreased by 0.
The slight increase in the expense ratio during the period was mainly due to the company’s expansion of market expansion, budget incentive amortization and R & D expansion.
Winning the first order for mobile edge computing server, the edge computing market will become a new growth engine.
A few days ago, the company won the OTII server equipment procurement project of the China Mobile Research Institute. The winning product was NE5260M5, which is mainly used in the edge computing pilot and test business scenarios of the China Mobile Research Institute.
This is the first time that the three major telecom operators have purchased edge computing servers.
With the commercialization of 5G, the edge server market will begin to explode.
The edge server needs to be deployed in a telecommunication data center with a harsh environment. The deployment environment is severely bad, and telecommunication services have great requirements on server stability, real-time performance, and management convenience.
NE5260M5 is also designed for high temperature resistance, dust resistance, corrosion resistance, electromagnetic compatibility, and shock resistance. It can withstand the harsh physical environment of the edge data center, can withstand 40 degrees ambient temperature, 85% relative humidity, and it is suitable for telecommunications.Business applications are being enhanced.According to IDC data, more than 50% of the data in 2020 will need to be analyzed, processed, and stored at the edge of the network.
We believe that 5G business will drive the explosion of edge computing scenarios, and the accelerated growth in demand for edge computing servers will become a new engine for the company’s growth.
Strategic cooperation with 成都桑拿网 the three major TOP distributors in Europe has accelerated the internationalization process.
According to the group, ALSO and Duttenhofer respectively reached strategic cooperation, and the internationalization of Inspur has accelerated.
These three distribution channels have their own characteristics and have a significant layout in the European market. With the cooperation, Inspur will transform its localization advantages in Europe, further expand the European market and promote the company’s international layout.
We believe that the development of overseas markets is an important means for the company to break the growth limit, and it is also a necessary path for the company to further improve its ranking in the global market.
With the cooperation with overseas distributors and the company’s own overseas expansion, it is expected that the company’s overseas revenue will continue to grow rapidly.
To sum up the profit forecast and investment rating, we look at the future development of the company. It is expected that the company’s EPS for 2019-2021 will be 0.
00 and 1.
44 yuan / share, maintain “overweight” rating.
Risks indicate that the overall development of the server market is less than expected; fierce competition in the server business; the company’s overseas market expansion is less than expected; the artificial intelligence business is not advanced as expected, etc.