\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Event: in 2021, Zte Corporation(000063) achieved an operating revenue of 114522 billion yuan, yoy + 12.9%; The net profit attributable to the parent company was 6.813 billion yuan, yoy + 59.9%; The net profit of non parent company deduction was 3.31 billion yuan, yoy + 219.2%; Realize eps1 47 yuan; The net operating cash flow was 15.72 billion yuan, yoy + 53.7%, and the performance was in line with our expectations.
Coordinated growth of three major businesses and continuous improvement of market share: Zte Corporation(000063) operator network, government enterprise business and consumer business developed well in 2021. In terms of operator networks, the operating revenue in 2021 was 75.71 billion yuan, a year-on-year increase of 2.3%. In 2021, the shipment volume of 5g base stations ranked second in the world, and the products related to optical access and optical transmission remained in the leading position; In terms of government and enterprise business, the operating revenue in 2021 was 13.08 billion yuan, a year-on-year increase of 16.0%, and the revenue of China's government and enterprise business increased by more than 40% year-on-year. In terms of IDC, intelligent management system has been widely used in Internet head customers, with commercial 140000 + racks; In terms of consumer business, the operating revenue reached 25.73 billion yuan in 2021, a year-on-year increase of 59.2%. Among them, home end products increased by more than 80% year-on-year, mobile phone products increased by nearly 40% year-on-year, and 5gcpe market share ranked first in the world. The annual shipment of 2021 terminals exceeded 100 million, and the overall shipment increased by 60% year-on-year.
The cost structure has been continuously optimized and the operation quality has been steadily improved: pay attention to technology and product R & D. in 2021, the proportion of R & D expenses in revenue was 16.4%, 1.8pp higher than that in 2020 (14.6%), the sales expense rate was 7.6%, 0.1pp higher than that in 2020, and the management expense rate was 4.8%, 0.1pp lower than that in 2020. In terms of cash flow, the operating cash flow in 2021 was 15.72 billion yuan, a year-on-year increase of 53.7%, exceeding 10 billion yuan for two consecutive years. In 2021, the gross profit margin was 35.24%, an increase of 3.63pp compared with 2020, of which the gross profit margin of network business of operators increased by 8.66pp, and the government enterprise business and consumer business decreased by 1.77pp and 5.38pp respectively. We believe that with the optimization of the company's cost and expense structure, the company's operation quality will continue to improve steadily.
Accelerate the expansion of new business and actively create the second growth curve: Zte Corporation(000063) continuously increase the expansion in it business, digital energy and terminal fields, and actively create the second growth curve of the company Zte Corporation(000063) mainly focuses on energy, transportation, government affairs, finance, Internet and large enterprises. Relying on "precision cloud network" and "enabling platform", it actively arranges new infrastructure, 5g industry application and enterprise digital transformation and upgrading; In the field of it, Zte Corporation(000063) focuses on building servers, storage and operating systems (widely used in communication, automobile, electric power, rail transit and other industries. By the middle of 2021, more than 200 million sets had been shipped globally) Database (taking the distributed database goldendb as an independent innovation strategic product facing the ICT field, which has been commercially and stably operated in the core system of large commercial banks for more than three years) and other IT products have the low-level competitiveness and quickly become a 10 billion product; In the field of automotive electronics, integrate the advantages of ICT technology software and hardware, and establish an automotive electronic product line to help the development of intelligence, networking and electrification in the automotive field.
Profit forecast and investment rating: Based on the rapid growth of the company's government and enterprise business and the gradual recovery of the overseas market, we lowered the forecast of net profit attributable to the parent company from 9.806/12.342 billion yuan to 8.182/9.938 billion yuan in 20222023, and expected operating revenue of 12.247 billion yuan in 2024; The EPS forecast for 20222023 is lowered from 2.13/2.68 yuan to 1.73/2.10 yuan, and the EPS is expected to be 2.59 yuan in 2024. The current market value corresponds to 15 / 12 / 10 times of PE in 20222024. Based on the continuous development of 5g and the wave of digital transformation, the "buy" rating is maintained.
Risk warning: the growth of new businesses such as smart home and digital energy does not meet the expected risk; Exchange rate fluctuation risk of overseas business; Customer credit risk.
