\u3000\u30006 Zhongrun Resources Investment Corporation(000506) 00050)
Event: the company released its annual report for 2021, realizing a total operating revenue of 327.9 billion yuan, a year-on-year increase of 7.9%; The main business income reached 296.2 billion yuan, a year-on-year increase of 7.4%, an increase of 3.1 percentage points over the whole year of 2020; The net profit attributable to the parent company reached 6.31 billion yuan, a year-on-year increase of 14.2%, an increase of 3.4 percentage points over the whole year of 2020. EBITDA reached 96.1 billion yuan, an increase of 2.3% over the previous 20 years.
Mobile services have improved significantly, and 5g penetration has continued to increase. In 2021, the company’s mobile main business revenue was 164.1 billion yuan, a year-on-year increase of 4.8%, and the net increase of mobile billing users reached 11.3 million. ARPU reached 43.9 yuan, a year-on-year increase of 4.3%, and Dou reached 12.7gb. 5g package users reached 155 million, with a penetration rate of 48.9%. By the end of 2021, the company has available 6900005g base stations, 1.56 million 4G base stations, 95% 4G population coverage and 91% 4G administrative villages.
Fixed line broadband revenue maintained growth. In 2021, broadband revenue was 44.8 billion yuan, with a year-on-year increase of 5.2%, a net increase of 8.95 million users, and ARPU remained basically stable. In terms of fixed networks, we continued to expand the coverage of new regional networks and the transformation of PON + LAN regional networks. The total number of broadband ports reached 239 million, of which FTTH ports accounted for 91%. Speed up the deployment of Gigabit broadband, and broadband speed measurement is the first in all the north.
Innovative business is growing rapidly. The industrial Internet business revenue increased by 28.2% year-on-year to 54.8 billion yuan, accounting for 18.5% of the main revenue. Among them, the revenue of “Unicom cloud” was 16.3 billion yuan, a year-on-year increase of 46.3%. Big data revenue was 2.6 billion yuan, a year-on-year increase of 48.7%, and its market share remained the first among telecom operators for three consecutive years. The revenue of Internet of things was 6 billion yuan, a year-on-year increase of 43%. It services comprehensively serve customers’ digital transformation. Driven by the good growth of innovative business, the main business income of the company’s fixed network reached 129.6 billion yuan, a year-on-year increase of 10.9%.
Capex is expected to grow slightly in 2022 and grasp the opportunity of “counting from the east to the west”. In 2021, the company’s capital expenditure was 69 billion yuan, lower than the annual guideline of 70 billion yuan. The results of network co construction and sharing were obvious, and the investment efficiency was further improved. The company expects a slight increase in capital expenditure in 2022, of which 5g investment may be flat, focusing on increasing the investment of “counting East and counting West”.
Maintain the “buy” rating: considering the rapid growth of R & D expenses and the decline of comprehensive gross profit margin caused by the rapid rise of network operation costs, the EPS forecast for 22-23 years is reduced from 0.27/0.33 to 0.24/0.29 billion yuan (the reduction range is – 12% / – 14%), and the forecast for 24 years is 0.33 yuan, corresponding to pe15x / 13X / 11x. We believe that in the context of 5g industry cycle from 5g construction to 5g application, operators have the logic of long-term improvement, the company’s mobile revenue maintains stable growth, broadband access remains stable, the industrial Internet maintains rapid growth, and the continuous popularity of 5g is expected to further improve its performance. We are optimistic about its reversal trend in the context of 5g business and maintain the “buy” rating.
Risk tip: competition intensifies, the impact of fee reduction policy is higher than expected, and 5g application is lower than expected, resulting in the slowdown of traffic growth.
