\u3000\u30006 Zhongrun Resources Investment Corporation(000506) 00050)
Core view
In 2021, the revenue and profit increased steadily, and the dividend distribution increased by 31% year-on-year. The company achieved an operating revenue of 327.9 billion yuan (+ 7.9%) in 21 years; The net profit attributable to the parent company was 6.31 billion yuan (+ 14.2%). Among them, the revenue of 21q4 was 83.37 billion yuan (+ 6.2%), and the net profit attributable to the parent company was 629.6 million yuan (- 14.6%). The total annual dividend of the company is RMB 0.088 (+ 31.4%) per share. The second equity incentive plan was completed at the beginning of the year.
Revenue side: (1) 5g user penetration is ahead of the industry, and ARPU value increases by 4.3% year-on-year. The number of 5g package users of the company reached 155 million, with an increase exceeding expectations. The ARPU reached 43.9 yuan (+ 4.3%), the value of 5g gradually appeared, and the volume and price of mobile services have steadily warmed up. (2) The "three trillion" integration promoted the development of broadband. The fixed network business benefited from the development of fixed mobile integration led by 5g, which reached a record high. The annual net increase of broadband users was 8.95 million, and the revenue of fixed network business was + 5.2% year-on-year. (3) The rapid development of industrial Internet is the main driving force for business growth. Industrial Internet revenue was 54.8 billion yuan (+ 28%), accounting for nearly 60% of the growth of the company's main business. We believe that 5g's strategy of leading fixed mobile integration will drive the steady development of C-end business. The growth rate of b-end cloud related businesses has exceeded 30%, and the digital economy will drive new businesses to maintain double-digit growth.
Cost side: (1) capital expenditure is lower than expected, and capex enters a stable downward period. The capital expenditure of 21 years was 69 billion, lower than the plan at the beginning of the year. Sharing and co construction helps the company's operation trend become "light". (2) The operating cost is increased in the short term and controllable in the long term. The company's network operation cost is 53.1 billion yuan (+ 14.7%), and 5g energy consumption cost is high. However, the company's self-developed base station and IDC energy-saving projects have made breakthroughs. In the long run, the network operation cost is controllable. (3) Continue to increase R & D and marketing investment, but the growth rate is lower than the main business income. The company attaches importance to R & D and market competitiveness. R & D expenses are + 60% year-on-year, and the investment in talents and market is + 5.7% year-on-year,.
The growth of cash flow was stable, and the interest bearing debt decreased significantly. The cash flow from operating activities has increased steadily for five consecutive years. The free cash flow in 21 years was 43 billion yuan (+ 8%), and the interest bearing debt was 42.7 billion yuan (- 18%). Strong anti risk ability.
Industrial Internet is the main line of growth, and innovative business releases new momentum. Base on Yunda Wuzhi chain to lay a solid foundation for the five tracks. Make efforts to "count from the East and calculate from the west" to create a "5 + 4 + 31 + X" new data center system. The year-on-year growth rate of cloud, large, physical and it service revenue in 21 years was 329% / 48% / 40% / 33% respectively. The company demonstrated the application value of 5g industry to the world through the Winter Olympic Games, and 5g application contributed 6 billion revenue in 21 years.
The second phase of equity incentive was completed, the profit increased rapidly, and the journey of high-quality development was started. The unlocking condition of equity incentive is that the year-on-year growth rate of profit in 22-24 years is not less than 7% / 10% / 10%, and the growth rate of profit is much higher than that of income. Risk warning: 5g development is not as expected; The development of innovative business is less than expected; The impact of the epidemic has intensified.
Investment suggestion: 5g network construction has entered the medium term, and the slowdown of mobile business development will affect the overall revenue growth. Therefore, we have lowered our profit forecast. It is estimated that the revenue growth rate in 22-23 years will be + 5.3% / + 5.0% (originally predicted to be + 6.6% / + 4.9%), and the net profit attributable to the parent company will be 7 / 7.7 billion yuan (originally predicted to be 7.6/8.5 billion yuan), corresponding to PE of 16 / 15x, maintaining the "buy" rating.
