Inspur Information (000977): 5G is at the top of the wave

The server market welcomes many new opportunities.

5G gradually realizes that the gradual computing resources are rapidly concentrated in the cloud server. To the huge market that will generate edge computing from 0 to 1, the server market will usher in an unprecedented gap; the blowout of the demand for artificial intelligence computing power and the internal server market itself 3-4The annual update 杭州桑拿 cycle, the recovery of cloud infrastructure demand will lead the server industry to return to the boom cycle.

The company’s scale financial indicators show that the inflection point of scale effect has arrived.

Excluding non-recurring factors such as changes in the R & D capitalization rate, the company’s actual net profit growth rate in 2018 was as high as 159.

97%, far exceeding revenue, and the actual net profit margin increased significantly.

The company’s cash flow from selling goods and services increased by 81 in 2017.

57%, continued to improve in 2018, expanding up to 105.

62%, indicating that cash flow has greatly improved in 2017, especially after 2018.

In addition, the company’s receivables turnover rate was 7 from 2016.

41 rose to 10 in 2018.

55, accounts payable turnover rate from 8 in 2014.

84 has been down to 5 in 2018.

26. The expansion of the right to speak in the industrial chain has significantly increased.

The best choice in rights issue or company alternative financing scheme.

According to the financial statements, the company’s monetary funds can only meet its own 1-1.

The amount of procurement funds around May is expected to increase to about 65% in the middle of the year. The transfer server industry will pick up in the future. The company’s business scale will expand in the future, and there may be a funding gap.

Among the alternative financing schemes, the issuance of convertible bonds is subject to a limit of more than 6% of the ROE in the past three years. Additional issuance financing needs at least one year to raise funds in place. The best choice is a rights issue or supplementary financing scheme.

History has proven that company equity financing is an advance layout of great opportunities for the development of the industry.

The company’s last rights issue was funded in the next month of 2017, most of which was used to replenish liquidity and repay bank loans. Subsequently, the server industry accelerated into the boom cycle in the second half of the year, and the company’s revenue increased by 101 in 2017.

21%, deducting non-net profit increased by 468.

92%, the cash flow of goods sold increased by 81.

57%. On this basis, the net profit rate attributable to shareholders of the parent company after deductions for 2018 reached 83.
.

66%, and even more amazing is that the scale of cash flow from sales of goods reached 105.

62%.

Investment advice: The company is the core target of cloud computing led by our entire market. The improvement of these financial data has reflected the effect of scale. 2019 will be a key year for the company’s net profit margin to significantly increase.Increasing demand for edge computing, AI computing, etc., and the recovery of cloud infrastructure demand, the company’s performance is resilient, and the top growth path in the global server market is clear and clear. EPS is expected to be 0 in 2019-2020.

66, 1.

09 yuan, maintain Buy-A rating, 6-month target price of 30 yuan, continue to strongly recommend.

Risk reminders: Macroeconomic downside risks; intensified trade disputes between the United States and China; tight cash flows due to higher-than-expected business growth.