Baoxin Software (600845) 2019 Semi-annual Report Comments: IDC’s Listing Rate Continues to Rise and Profitability Continues to Enhance

Baoxin Software (600845) 2019 Semi-annual Report Comments: IDC’s Listing Rate Continues to Rise and Profitability Continues to Enhance

Event: The company released its semi-annual report for 2019 on August 19, 2019.

In the first half of 2019, the company achieved operating income26.

9.9 billion yuan, an annual increase of 11.

86%; net profit attributable to mothers4.

0.6 billion, an annual increase of 37.

28%.

IDC’s listing rate continues to rise, enhancing performance.

In the second quarter of 2019, the company achieved operating income13.

5.4 billion, a decline of 3 every year.

18%, net profit attributable to mothers2.

04 billion, an increase of 38 every year.

16%.

In the second quarter, the company realized deduction of non-attributed net profit1.

900,000 yuan, an annual increase of 50.

14%, promoting the improvement of the company’s income quality.

From each business point of view: software development and engineering services operating income was 17.

4.4 billion, has sailed 8 a year.

68%.

Service outsourcing revenue was 8.

USD 8.9 billion, an annual increase of 31.

10%; system 深圳桑拿按摩网 integration operating income is 0.

5.9 billion, down 50 each year.

54%.

The company’s performance growth in the first half of 2019 benefited from two reasons: (1) A series of information engineering projects such as “new infrastructure” promoted the demand for data centers, and the shelf rate continued to rise.

(2) The merger and reorganization of the iron and steel industry in the company’s main markets continued to advance, and the demand for intelligent production based on the industrial Internet platform increased.

Profitability has steadily improved.

In the first half of 2019, the company’s gross sales margin increased year by year3.

The 51 averages are 32.

42%.

Among them, software development and sales gross margin was 26.

10%, up 4 each year.

02 single; service outsourcing sales gross margin is 45.

52%, a decrease of 1 per year.

96 single; gross profit margin of system integration equipment sales is 14.

00%, an increase of 5 per year.

19 averages.

In the first half of 2019, the company’s net sales margin was 15.

74%, up 2 each year.67 averages.

Among them, the sales expense ratio decreases by 0 every year.

The 20 averages are 2.

84%, the management expense ratio (including research and development expenses) decreases by 0 every year.

The 44 averages are 12.

40%, the financial expense rate drops by 0 every year.

55 averages are -0.

88%.

The market space is huge and the company has a bright future.

With the country’s vigorous promotion of “Internet +”, digital economy and other information construction, IDC has ushered in a golden period of development.

According to ICT Research, the IDC market size will exceed 65 billion by 2017, and the CGAR will reach 26 in the past five years.

58%.

In the medium and long term, driven by the continued development of new fields such as mobile Internet, big data, and the Internet of Things, enterprises’ demand for data processing and storage will become stronger.

Driven by this, the IDC market is expected to maintain a high-speed development trend, and the market size is expected to exceed $ 150 billion in 2020.

As a leading company in the IDC industry, the company fully independently develops the strength of IDC and has a certain right to speak in the industry.

At the same time, the phase IV project is expected to deliver nearly 9,000 cabinets one after another. In the future, stimulated by policies and demand, the company’s performance growth potential is huge.

Investment advice: Maintain the recommended level.

Due to the rapid development of the cloud computing industry, the company is backed by Baosteel, the merger and reorganization of the steel industry continues to advance, the demand for intelligent production increases, the industry’s demand for IDC increases, and the company is competitive in future development. Therefore, we maintain a recommended rating.

It is expected that the company’s EPS for 2019-2020 will be 0.

73 yuan, 0.

97 yuan, corresponding to PE is 44 times, 33 times.

Risk reminders: policy changes, less-than-expected technological progress, and increased competition in the industry.