\u3000\u3000 Zte Corporation(000063) (000063)
Core view
On January 29, Zte Corporation(000063) released the performance forecast for 2021: the net profit attributable to ordinary shareholders of listed companies was 6.5-7.2 billion yuan, a year-on-year increase of 52.59% – 69.02%; The basic earnings per share was 1.40-1.55 yuan / share, with a year-on-year increase of 52.17% – 68.48%. In 2021, the company’s operating revenue achieved double-digit year-on-year growth, among which the operating revenue of China, international market and operator networks, government enterprises and consumers all achieved year-on-year growth; During the reporting period, the company’s gross profit margin recovered and improved year-on-year. We predict that it will increase from 31.6% in 2020 to 35.2% in 2021.
The business of operators operates steadily, and 5g construction helps the business boom. In the Chinese market, with the promotion of 5g construction, the business of operators has maintained a boom growth. The company has improved from product innovation, R & D investment, efficient delivery and other aspects. At the same time, it has benefited from the upgrading, transformation and new construction of overseas market network, and the pattern of advantageous products of the company has been continuously optimized.
Government and enterprise businesses continued to increase investment, and “one base and two wings” enabled digital transformation. Zte Corporation(000063) continue to increase investment in marketing, channels and programs, and empower thousands of businesses through the digital ability of “one base and two wings”. The company has created a variety of star products: server and storage, and has entered the leading company in finance, Internet, energy and other industries; Goldendb distributed database was rated as the first brand of domestic distributed database in the financial industry, and expanded from finance to other fields.
Accelerate the construction of a big ecosystem for consumer business and expand the growth space in the future. Thanks to the company’s continuous investment and innovation in brands, products and channels, with the further development and maturity of the 1 + 2 + n full scene smart ecosystem with mobile phones as the entrance in the future, it will help to open up the company’s future growth space
Profit forecast and investment suggestions
We predict that the net profit attributable to the parent company in 21-23 years will be 6506 / 8518 / 10032 million yuan respectively (the previous value is 7093 / 8592 / 10088 million yuan respectively). The company’s asset impairment loss in 2021 is expected to be about 1.4 billion yuan, of which the asset impairment loss in a single quarter in the fourth quarter is about 1.1 billion yuan, which is mainly due to the company’s preparation of key materials in advance under the condition of tight global chip supply. In the future, considering that the company’s material preparation and production cycle are relatively long and need to be consistent with the previous policies, and the provision for inventory falling price is made based on the principle of prudence, we will adjust the asset impairment loss of the company in 21-23 years.
The value of the comparable company law is 30 times the average price earnings ratio of the company adjusted in 2021. In view of the fact that the company is the leading target in the 5G field, it gives a valuation premium of 10%, which is 33 times the price earnings ratio, corresponding to the target price of 45.38 yuan in 2021, and maintains the “buy” rating.
Risk tips
The progress of 5g construction outside China was less than expected, and the trade friction between China and the United States in the field of science and technology continued to intensify
