\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Events
The company released its annual report for 2021. In 2021, the company achieved an operating revenue of 114.52 billion yuan, a year-on-year increase of 12.9%; The net profit attributable to the parent company was 6.81 billion yuan, a year-on-year increase of 59.9%; The non net profit deducted was 3.31 billion yuan, a year-on-year increase of 219.2%.
Our comments are as follows:
Revenue has achieved double-digit year-on-year growth, and the three business segments and China / international markets have achieved positive growth.
In 2021, the company's network revenue of operators was 75.71 billion yuan, with a year-on-year increase of 2.3%. It deeply participated in China's 5g and digital construction, and the global market grew steadily. In 21 years, the global 5g base station delivery volume was the second, and the global operator share of optical network was the second (omedia ended 21q3). The market competition strength was outstanding. The revenue of government and enterprises was 13.08 billion yuan, a year-on-year increase of 16.0%, of which the revenue of servers and storage doubled, goldendb was rated as the first brand in China's distributed database financial industry, and the commercial 140000 + rack of IDC intelligent management system. The markets such as energy, transportation, government affairs, finance and Internet grew rapidly. The consumer business income was 25.73 billion yuan, with a year-on-year increase of 59.2%, of which the mobile phone product income increased by nearly 40% year-on-year, and the household terminal income increased by more than 80% year-on-year. 5gcpe ranked first in the world. The company has made great efforts in brand, products and channels.
The gross profit margin recovered and improved year-on-year, the gross profit margin of some structural products decreased, and the overall gross profit margin is expected to continue to improve in the future.
In 2021, the company's overall gross profit margin was 35.24%, an increase of 3.63 percentage points year-on-year. Among them, the network gross profit margin of operators was 42.45%, a significant increase of 8.66 percentage points year-on-year; The gross profit margin of government and enterprise business was 27.05%, a year-on-year decrease of 1.77 percentage points, mainly due to the decline of gross profit margin of international business; The gross profit margin of consumer business was 18.20%, a year-on-year decrease of 5.38 percentage points, mainly due to the decline in the gross profit margin of mobile phones and overseas home terminals. In the future, with the continuous optimization of the operator network, the gradual easing of the pressure on the cost of raw materials and the further optimization of the product structure, the gross profit margin of each business of the company is expected to increase steadily.
The scale effect is beginning to appear, and the short-term cost investment is still high. It is expected that the scale effect will continue to be reflected in the future.
The absolute gross profit of the company in 2021 was 40.36 billion yuan, an increase of more than 8 billion yuan compared with 32.07 billion yuan in 2020. In 2021, the company's sales expenses increased by 1.15 billion, management expenses increased by 450 million, R & D expenses increased by 4.01 billion, financial expenses increased by 540 million (including exchange loss increased by 870 million), and the overall expenses increased by 6.15 billion yuan. Throughout the year, the increase of expenses is slower than the increase of absolute gross profit, and the scale effect begins to reflect. At the same time, the short-term high-intensity market and R & D investment will further strengthen the company's brand image and global competitiveness, promote the high-quality growth of income, the cost rate is expected to be gradually diluted in the future, and the impact of exchange gains and losses is expected to be weakened. It is expected that the scale effect of the company will continue to be reflected.
The operating profit has been significantly improved and the overall profitability has been continuously optimized.
From the operating profit that the market pays more attention to, in 2021, the company's investment income + profit and loss from changes in fair value = 2.663 billion yuan, and 1.521 billion yuan was withdrawn for asset impairment loss. After excluding the above effects from the net profit attributable to the parent company of 6.81 billion yuan, the company's overall operating profit was 5.67 billion yuan, a year-on-year increase of 60.9%, and the operating profit was significantly improved. From the company's gross profit margin, net profit margin, deduction of non net profit margin, roe and other profitability indicators, the annual average of 21 has significantly improved year-on-year. With the steady growth of various businesses and the further embodiment of scale effect in the future, the overall profitability of the company is expected to be further optimized.
It is proposed to promote repurchase and help long-term growth.
The company plans to repurchase no more than 2% of the total share capital of A-Shares for employee stock ownership, equity incentive or issuance of convertible bonds, which will help strengthen team incentive or supplement cash flow and help the company grow in the long term.
Looking forward to the future, under the general trends of 5g new infrastructure, digitization and dual carbon economy, the company 1) the market competitiveness of operators is outstanding, and 5g's global share is expected to increase steadily; 2) Government and enterprise businesses have expanded it, 5g industry applications, digital energy, automotive electronics, etc., creating a second growth curve, with many highlights in the future; 3) Remarkable achievements have been made in the construction of consumer business brands, channels and products. Under the absolute growth of the company's scale and gross profit, the company is expected to show a sustained effect. It is estimated that the net profit attributable to the parent company in 22-24 years will be 9.0 billion yuan, 11.0 billion yuan and 12.8 billion yuan, corresponding to the price earnings ratio of 13 times in 22 years and 11 times in 23 years. The "buy" rating is reiterated.
Risk warning: the capital expenditure of operators is lower than expected, the impact of the epidemic is higher than expected, the progress of new business is slower than expected, the risk of international political factors, and the repurchase still needs to be approved by the general meeting of shareholders
