\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 728 China Telecom Corporation Limited(601728) )
Event:
On March 12, 2022, China Telecom Corporation Limited(601728) released the annual and recent operating conditions of 2021 and announced the unaudited main financial data of 2021. The operating revenue of the company in 2021 increased by 10% – 12% year-on-year, and the profit attributable to the parent company increased by 23% – 25% year-on-year.
Comments:
High quality development has achieved remarkable results, and the C-end business continues to grow
In 2021, guided by the high-quality development requirements of the enterprise, the company focused on the quality of business development, promoted the upgrading of personal emerging information consumption demand, enriched the connotation of smart home digital life services, effectively promoted 5g tob services with the help of “co construction and sharing” network advantages, and the mobile and fixed broadband services continued to grow. By the end of 2021, the company had 372 million mobile users, 5g package user penetration exceeded 50%, and nearly 170 million wired broadband users.
Give full play to the advantages of cloud resources and undertake the implementation of “counting from the east to the west”
In 2021, the company actively grasped the strategic opportunity, implemented the “cloud to digital transformation” strategy, accelerated the construction of new information infrastructure for cloud network integration, upgraded Tianyi cloud to distributed cloud, continuously improved the security capability of cloud network, and further consolidated the resource advantages of cloud network. Focusing on the layout of the national “Eastern digital computing and Western computing” project and the integrated big data center, comprehensively deploy the data center, DCI network, computing power and product services, and actively undertake the implementation of the “Eastern digital computing and Western computing” project.
Earnings forecast, valuation and rating
It is estimated that the company’s revenue from 2021 to 2023 will be 429 / 4664 / 511.9 billion yuan respectively, the net profit attributable to the parent company will be 257 / 286 / 32.5 billion yuan respectively, the EPS will be 0.28/0.31/0.36 yuan / share respectively, and the corresponding PE will be 14 / 13 / 11 times respectively. Considering that the net profit attributable to the parent company in the first three quarters of 2021 increased by 17.3% year-on-year, and the year-on-year growth rate of net profit attributable to the parent company in 2021 increased to 23% – 25%, we gave a “buy” rating of 20 times the target PE in 2022, corresponding to the stock price of 6.2 yuan.
Risk tips
Industry policy risk, increased market competition risk, 5g development is less than expected risk.
