\u3000\u3 Shengda Resources Co.Ltd(000603) 019 Dawning Information Industry Co.Ltd(603019) )
Core view
Event: 1) on February 25, China Telecom Corporation Limited(601728) released the bid winning status of 20212022 server centralized procurement project. Among them, G series is domestic chip server, equipped with Kunpeng, haiguang or Feiteng chips, with a total of 53401 servers.
2) the company released the 2021 performance express, with 2021 revenue of 11.18 billion yuan (+ 10.1%), net profit attributable to the parent company of 1.13 billion yuan (+ 38.0%), and deduction of non net profit of 750 million yuan (+ 43.2%).
Profit growth continued to be higher than revenue, and structural upgrading strengthened performance toughness. Since 2019, the company has achieved profit growth higher than revenue for three consecutive years. From 2019 to 2021, the growth rate of net profit attributable to the parent company is 37.9%, 38.5% and 38.0% respectively, and the growth rate of net profit deducted is 41.7%, 36.6% and 43.2% respectively, while the growth rate of revenue in the same period is 5.2%, 6.7% and 10.1% respectively. The profit growth of the company shows strong toughness. We believe that the company is active in business areas with high gross profit margin such as high-performance computing, and the profit margin level is expected to continue to improve.
With the continuous development of the industry, domestic servers and related ecological manufacturers have ushered in development opportunities. On February 17, the official website of China Mobile announced the bid winning results of package 8 and package 13 of 20212022pc server centralized procurement project, including 28000 servers and 3775 servers, with a bid winning amount of about 2.5 billion yuan; Previously, on January 14, 2022, China Mobile announced the bid winning announcement of bid packages 3, 7, 11 and 12, including ZTE, Zhongke controllable and other companies, with a total bid winning amount of 1.3 billion yuan. We believe that the promotion of credit innovation in the financial industry and the operator industry is expected to enter a new stage in 2022, and domestic servers and related ecological manufacturers are expected to obtain development opportunities.
The leading position of Xinchuang continues to be strengthened, and the advantages of domestic x86 ecosystem continue to be strengthened. Dawning is the leader of Xinchuang server. It has accumulated a deep technical foundation and customer trust in the field of high-performance computing, and occupies a high share in the pilot of Xinchuang in the industry. Moreover, the company’s fund-raising and investment projects include products and technical fields such as IO module R & D and industrialization, BIOS startup firmware and BMC management firmware, carry out core module layout around domestic high-end CPU, and continue to expand computing ecology such as cloud, high-end computing, storage, network integration and independent software. We believe that the company’s position as the leader of Xinchuang is stable, the domestic x86 ecosystem is constantly improved, and the competitive advantage is expected to be strengthened.
Profit forecast and investment suggestions
As the performance express is not the audit result, and the specific data of each business caliber has not been published, we will not adjust the previous EPS forecast temporarily. We predict that the company’s EPS in 21-23 years will be 0.74/0.96/1.23 yuan. According to the valuation level of comparable companies, the company is given 41 times PE for 22 years, corresponding to the target price of 39.36 yuan, maintaining the buy rating.
Risk tips
The policy is not as expected; Industry competition intensifies; R & D is not as expected; Haiguang’s performance is lower than expected; Trade restrictions; Uncertain risk of issuance and raising
