\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Event overview: on March 8, 2022, the company released its annual report for 2021, achieving an operating revenue of 114.52 billion yuan, a year-on-year increase of 12.9%, a net profit attributable to the parent company of 6.81 billion yuan, a year-on-year increase of 59.9%, and a net profit deducted from non attributable to the parent company of 3.31 billion yuan, a year-on-year increase of 219.2%. The performance met our expectations.
At the revenue end, the three businesses in the two regions have increased, the basic market is stable, and the second growth curve has abundant kinetic energy
In terms of regions, the revenue in the Chinese market was 78.07 billion yuan, a year-on-year increase of 14.7%, the revenue in the international market was 36.45 billion yuan, a year-on-year increase of 9.1%, and the proportion of China's revenue further increased to 68.2%.
In terms of business, the network revenue of operators was 75.71 billion yuan, an increase of 2.3% year-on-year, mainly due to the increase of China's bidding share and the expansion of overseas value markets such as Southeast Asia; The revenue of government and enterprise business was 13.08 billion yuan, with a year-on-year increase of 16.0%. The revenue of China's government and enterprise business increased by more than 40% year-on-year. Among them, the revenue of server storage doubled. The scale of fist products such as data center and goldendb distributed database entered the top enterprises, and the brand influence continued to improve; The revenue of consumer business was 25.73 billion yuan, a year-on-year increase of 59.2%, of which the revenue of home terminals increased by more than 80% and the revenue of mobile phones increased by nearly 40% year-on-year.
Looking to the future, according to Tian Yulong, spokesman of the Ministry of industry and information technology, the target of building more than 6 Shenzhen Fountain Corporation(000005) g base stations in 22 years (654000 stations in 21 years) is reasonable and in line with the law of "slow and long" 5g construction cycle. The digital economy plan of the 14th five year plan focuses on the construction of Gigabit broadband, and the fixed network also ushers in development opportunities. Under the background of maintaining the stability of the total network volume of operators and optimizing the competition pattern, the company is basically stable. In the market expansion of government enterprise business, the company has also made a breakthrough recently. In the centralized purchase of servers in China Telecom Corporation Limited(601728) 20222023, the company is the only manufacturer shortlisted in the full standard package among the 12 manufacturers. We believe that the second growth curve represented by government enterprise business has sufficient momentum in the future.
The gross profit margin improved year-on-year, and the 22-year profit growth is expected
In the 21st year, the company's overall gross profit margin was 35.24%, with a year-on-year increase of 3.63pct. Among them, the network gross profit margin of operators was 42.45%, an increase of 8.66pct year-on-year, the gross profit margin of government and enterprise business was 27.05%, a year-on-year decrease of 1.77pct, and the gross profit margin of consumer business was 18.20%, a year-on-year decrease of 5.38pct. At present, the quotation of the head manufacturers in the centralized purchase of operators tends to be rational. With the continuous increase of the proportion of self-developed chips of the company and the gradual confirmation of the revenue of 5g base station orders in the second half of 21, the gross profit margin of the operator network is expected to be further improved, and the overall gross profit margin of the company has room for further improvement.
The cost structure was optimized, the R & D cost rate increased, the sales cost rate stabilized, and the management cost rate decreased.
The company continued to strengthen R & D investment in key areas such as 5g and digitization to consolidate its long-term competitiveness. The annual R & D investment was 18.804 billion yuan, and the R & D expense rate was 16.42%, an increase of 1.82pct year-on-year. We increased investment in government, enterprise and consumer channels, and the sales expense rate was 7.63%, an increase of 0.16pct year-on-year. At the same time, the management efficiency was also improved, and the management fee rate was 4.75%, a year-on-year decrease of 0.17pct. Investment suggestion: with the increase of gross profit margin and the optimization of expense structure, the company's profit is expected to be fully released. We expect the company's net profit in 22-24 years to be 8.5 billion / 10.3 billion / 12.1 billion respectively, corresponding to 14 times / 12 times / 10 times of PE, and 31 times of the company's valuation center in recent five years. Maintain a "recommended" rating.
Risk tip: the capital expenditure of operators is less than expected, and the business expansion of government and enterprises is less than expected.
