\u3000\u30 Beijing Jingyeda Technology Co.Ltd(003005) 71 Hangzhou Anysoft Information Technology Co.Ltd(300571) )
Events
The company released the performance express for 2021, achieving an operating revenue of 3.588 billion yuan, a year-on-year increase of 48.99%, and a net profit attributable to the parent company of 290 million yuan, a year-on-year increase of 37.77%.
The company released the operating conditions from January to February 2022. The new winning of smart home business totaled about 881 million yuan (including tax), and the net profit attributable to the parent company is expected to increase by more than 40% year-on-year.
Brief comment
1. Smart home business is growing rapidly. It is estimated that the executable orders this year have exceeded 5.5 billion yuan.
The company released the performance express for 2021. In 2021, the operating revenue was 3.588 billion yuan, a year-on-year increase of 48.99%, and the net profit attributable to the parent company was 290 million yuan, a year-on-year increase of 37.77%. In 2021, the company’s smart home business order scale increased significantly compared with that in 2020, which promoted the improvement of smart home business income and achieved rapid growth in performance, which was in line with market expectations.
With the support of national policies, the “double Gigabit” network has developed rapidly. Operators have further accelerated the layout of basic networks and smart homes, providing important opportunities for the development of the company’s smart home business and 5g communication equipment business. The company has continuously strengthened operation management and safety production, effectively improved the level of operation management and further improved the overall profit level.
From January to February 2022, the company’s smart home business won a total of about 881 million yuan (including tax), and the net profit attributable to the parent company is expected to increase by more than 40% year-on-year. According to the third quarterly report of the company, as of September 30, 2021, the outstanding orders of the company’s smart home business (excluding antenna project) were about RMB 5.025 billion, the order amount of antenna project was RMB 667 million, and the total outstanding order amount is estimated to be about RMB 5.692 billion. In the fourth quarter of 2021, the company achieved an operating revenue of 1.042 billion yuan. From January to February 2022, the smart home business won a new bid of 881 million yuan. Based on this calculation, we estimate that the company’s executable orders this year will exceed 5.5 billion yuan. Considering that the bidding for home broadband equipment of operators has not been fully opened this year, the company’s orders still have room for growth, which is expected to support the rapid growth of the company’s revenue in 2022.
2. The gross profit margin of the company decreased in 2021 and is expected to stabilize and recover this year.
In 2021, the company’s revenue increased by 48.99%, the operating profit increased by 16.46%, and the net profit attributable to the parent company increased by 37.77%. This reflects the decline of the company’s comprehensive gross profit margin and net profit margin in 2021, but it is generally stable. We expect that first, the company’s revenue structure has changed, and the proportion of smart home business in revenue has increased significantly. The gross profit margin of this business is lower than that of reading business. Second, the price rise of raw materials such as upstream chips in 2021 has affected the gross profit margin of the company’s smart home business. However, the company has still achieved a stable return to parent net profit margin through cost rate control. With the opening of a new round of bidding, the company’s quotation has increased compared with that in 2021, and the superposition of raw materials shows an overall easing trend. We expect that the company’s gross profit margin is expected to stabilize and recover this year. With the rapid growth of revenue, there is still room for the cost rate to decline.
3. The digital economy development plan of the 14th five year plan clearly promotes the construction of Gigabit networks.
On January 12, the State Council issued the 14th five year plan for the development of digital economy (hereinafter referred to as the plan), which involves optimizing and upgrading digital infrastructure, giving full play to the role of data elements, vigorously promoting industrial digital transformation, accelerating digital industrialization, strengthening the security system of digital economy, etc. The plan clearly proposes to speed up the deployment of gigabit optical fiber network, realize the full coverage of gigabit optical fiber network in urban areas and key townships, and specify quantitative indicators. The scale of Gigabit broadband users in 2025 will increase by 8.4 times compared with 2020.
Gigabit home broadband has just entered the explosive stage, and its penetration is expected to increase rapidly from 2022 to 2023. According to the statistics of the Ministry of industry and information technology, there were 34.56 million Gigabit broadband users in China at the end of 2021, including a net increase of 28.16 million in 2021. Looking back on the development of 100m broadband, the penetration rate was 16.5% in 2016, 38.9% in 2017 and 70.3% in 2018. By the end of 2021, the penetration rate of Gigabit broadband users in China was only 6.45% and 1.3% by the end of 2020. Referring to the development process of 100m broadband, the penetration rate of Gigabit broadband users is expected to increase rapidly to about 35% from 2022 to 2023. We expect that the annual net increase of Gigabit broadband users in China will be 70 million and 120 million respectively from 2022 to 2023, which will promote the demand for home gateway, and the company will fully benefit.
4. Shenzhen Zhaoneng has been deeply engaged in the field of optical fiber network access equipment, and its business has accelerated in recent years.
In April 2019, the company acquired Shenzhen Zhaoneng and actively deployed smart home business. Shenzhen Zhaoneng is a leading enterprise in network intelligent terminal equipment. It mainly provides broadband network terminal, IOT pan intelligent terminal and other smart home equipment and related services for telecom operators, including smart home gateway, IPTV / Ott terminal, WiFi 6, etc. Relying on the advantages of high-quality product technology and perfect marketing service network, Shenzhen Zhaoneng has deeply cultivated the operator market. It has become one of the important suppliers of the three operators, and the sales orders continue to land.
After Shenzhen Zhaoneng was acquired by the company, its market share increased significantly. In the public centralized procurement of China Mobile smart home gateway from 2017 to 2019, Shenzhen Zhaoneng failed to win. Among the three procurement packages of China Mobile smart home gateway products in 2020, Shenzhen Zhaoneng’s winning shares in procurement package 1 and procurement package 2 were 17.39% and 22.58% respectively, and procurement 3 failed to win. According to the announcement released by the company on January 6 this year, among the two procurement packages for emergency centralized procurement of smart home gateway products by China Mobile from 2022 to 2023, Shenzhen Zhaoneng’s winning shares in procurement package 1 and procurement package 2 were 20.03% and 26.96% respectively, ranking first. We believe that after the company acquired Shenzhen Zhaoneng, the good business relationship established through long-term cooperation with operators has significantly promoted the business development of Shenzhen Zhaoneng.
5. The company has become one of the first members of the yuancosmos Industry Committee of China Mobile Communications Federation, and the business layout of yuancosmos has made further progress.
On January 11, the yuancosmos Industry Committee of China Mobile Communication Federation announced the list of the first batch of members, Hangzhou Anysoft Information Technology Co.Ltd(300571) became the first batch of members and served as the vice chairman. The members of China Mobile Communications Federation include China Mobile, China United Network Communications Limited(600050) , China Telecom Corporation Limited(601728) etc. the yuan universe industry committee was approved to be established on October 15, 2021. It is the first yuan universe Industry Association approved in China and is committed to promoting the healthy and sustainable development of Yuan universe industry.
On November 9, 2021, the company signed the strategic cooperation framework agreement with China Mobile (Jiangxi) Virtual Reality Technology Co., Ltd. and Dazhong Siasun Robot&Automation Co.Ltd(300024) Co., Ltd. to give full play to the advantages of the three parties in R & D, products and solutions in their respective industries and jointly promote the application of VR / AR, Siasun Robot&Automation Co.Ltd(300024) , artificial intelligence, digital twins and other achievements in smart cities, smart education Cultural tourism mutual entertainment, digital factory and other fields. The company can provide VR / AR glasses equipment for the cooperation in terms of hardware. At the same time, the company has massive and high-quality digital reading content, and focuses on the new path of three-dimensional industrial development of network literature with IP as the core, which can provide rich entertainment content for the cooperation. It will explore VR / AR, Siasun Robot&Automation Co.Ltd(300024) metauniverse and other related fields and promote the construction of 5g + VR related industry ecosystem.
The company has a long-term and close cooperative relationship with telecom operators, and there is a broad space for business expansion of meta universe in the future. Over the years, the accumulated experience in the development and operation of value-added telecom services has enabled the company to establish an in-depth mutually beneficial cooperation mode with telecom operators, which not only ensures that the company’s existing products can make full use of the operators’ communication resources and charging system, but also lays a good foundation for the multi-mode cooperation between the company and operators. We believe that the company started with content business and has reached cooperation with China Mobile in the business related to metauniverse. In the future, it can not be ruled out that it can also establish cooperative relations with other operators. At the same time, the shareholders of the company include Zhejiang newspaper digital culture group and Xinhuanetco.Ltd(603888) , so the company has great imagination space in the layout of metauniverse in the future.
6. Profit forecast: the company has full orders on hand, which can support the rapid growth of future performance. The imagination space of yuanuniverse layout is large, so the profit forecast is raised.
From January to February 2022, the company’s smart home business won a new bid of 881 million yuan. We estimate that the company’s executable orders this year have exceeded 5.5 billion yuan. However, the bidding of operators’ home broadband equipment has not been fully opened this year, and it is expected that more orders will be placed during the year. This is expected to support the company’s revenue to continue to achieve rapid growth in 2022. Therefore, we raised the company’s profit forecast. It is estimated that the company’s operating revenue in 20222023 will be 5.55 billion yuan (+ 14%) and 7.45 billion yuan (+ 19%), with a year-on-year growth rate of 66.67% and 34.23% respectively, and the net profit attributable to the parent company will be 486 million yuan (+ 8%) and 632 million yuan (+ 11%) respectively, with a year-on-year growth rate of 60.32% and 30.03% respectively. The corresponding PE of the current stock price is 13X and 10x respectively. The average PE of the company’s three-year period, five-year period and since listing are 25.78 times, 39.89 times and 41.48 times respectively. At present, the valuation is at the bottom of history and maintains the “buy” rating.
7. Risk warning: the development of smart home business is not as expected; Intensified market competition; Tight supply of raw materials; Poor cash flow caused by the occupation of funds in communication equipment business; The business development of Yuanyu universe is not as expected; Market systemic risk, etc.
