Sinnet(SZ:300383)2022-11-22 03:06Group 1: Company Overview - The company acquired Zhongjin Yunwang and Wushuang Technology in 2016, both of which have completed three years of performance commitments with stable operations [1] - Zhongjin Yunwang focuses on data center services primarily for financial clients, demonstrating strong customer stability and high rack utilization [1] - Wushuang Technology, engaged in internet marketing SAAS, has seen nearly a 2x increase in revenue since acquisition, establishing itself as a leading enterprise in the industry [2] Group 2: Financial Performance - Wushuang Technology reported a revenue of 3.348 billion yuan in 2020, with a net profit of 87.05 million yuan, indicating a relatively low gross margin [6] - The company’s accounts receivable stood at 1.95 billion yuan at the end of 2020, remaining stable compared to the previous year, with a significant portion being short-term receivables [3] - The company’s cash flow increased by 140.19% in 2020, reflecting strong operational cash flow [3] Group 3: Business Challenges and Strategies - The company has faced a slowdown in growth rates as it scales, with a focus on data center business which is capital-intensive and subject to regulatory constraints [2] - New data center projects in Fangshan, Jiading Phase II, and Yanjiao are expected to launch soon, with optimistic pre-sale conditions [2] - The company has terminated the Kunshan project due to lack of energy consumption approval, which has not impacted its financials [4] Group 4: Market Outlook - The demand for data centers is expected to remain strong due to the acceleration of digitalization globally, despite potential short-term fluctuations in capacity due to policy and economic factors [4] - The company’s data centers are primarily located in the Beijing-Tianjin-Hebei and Yangtze River Delta regions, where acquiring new energy and project approvals remains challenging [7] - The company believes that the long-term demand for data centers will continue to grow as digital infrastructure becomes increasingly essential [4] Group 5: Future Developments - The company plans to consider the divestiture of Wushuang Technology to focus on its core IDC business, given the low gross margin of Wushuang's operations [5] - The company has received approval from the China Securities Regulatory Commission for a private placement, which will be executed at an appropriate time [5] - The company anticipates that approximately 8,000 to 10,000 cabinets will be available for deployment this year, depending on customer demand [6]