\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Key elements of the report:
The company released its 2021 annual report on the evening of March 8. The company achieved an operating revenue of 114522 billion yuan (YoY + 12.9%), a net profit of 6.813 billion yuan (YoY + 59.9%) attributable to shareholders of listed companies, and a net profit of 3.306 billion yuan (YoY + 219.2%) excluding non recurring profits and losses attributable to shareholders of listed companies. In 2021, the company achieved EPS 1.5 billion yuan 47 yuan, the performance is in line with expectations.
Key investment points:
The annual performance was basically in line with expectations, and all businesses grew steadily: the revenue of the company's three business lines achieved positive year-on-year growth, of which the operator's business increased by 2.29%, mainly due to the increase in the operating revenue of 5g wireless, servers and other products over the same period of last year, and with the company's continuous optimization of costs, the gross profit margin related to the operator's business increased by 8.66pct year-on-year; The government enterprise business increased by 16.03% year-on-year, mainly due to the increase of operating revenue of servers and Chinese subsidiaries over the same period of last year, and the consumer business increased by 59.22% year-on-year, mainly due to the greater contribution of mobile phones, home information terminals and other products. From the perspective of gross profit margin, the company's gross profit margin in 2021 was 35.24% (YoY + 3.63pct), which was mainly due to the increase of the overall gross profit margin driven by the increase of the purchase price of operators in 2021. The gross profit margins of Q1 / Q2 / Q3 / Q4 were 35.44% / 36.82% / 38.00% / 30.94% respectively. The decline of gross profit margin in Q4 was mainly due to the high proportion of consumer businesses with low gross profit margin.
Affected by inventory impairment, Q4 performance is under slight pressure. In a single quarter, the operating revenue of 2021q4 company in a single quarter was 30.696 billion yuan (YoY + 12.35%), and the net profit attributable to the parent company was 960 million yuan (qoq-45.89%, yoy-37.97%). The low profit in a single quarter was mainly due to the company's large-scale advance preparation of key materials such as chips. Considering that the company's material preparation and production cycle are relatively long, consistent with the previous policies, and the provision for inventory depreciation based on the principle of prudence, the company's total asset impairment loss in 2021 was about 1.4 billion yuan. Although this asset impairment has a certain negative impact on the company's performance in the short term, the provision of asset impairment loss is conducive to releasing risks in advance, improving the quality of statements, and does not affect the company's continuously improved operating conditions. We are still optimistic about the company's future performance growth potential.
Profit forecast and investment suggestions: it is estimated that the revenue category of the company from 2022 to 2024 will be 126.4/139.2/1540 billion yuan, the net profit attributable to the parent company will be 85.98/102.35/11.925 billion yuan, and the EPS will be 1.82/2.16/2.52 yuan respectively. The closing price of PE on March 8 will be 14x / 12x / 10x, maintaining the "buy" rating.
Risk factors: trade friction intensifies, China's 5g construction fails to meet expectations, and overseas market expansion is less than expected.
