\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Company events: Recently, Zte Corporation(000063) released its 2021 annual report. During the reporting period, the company achieved revenue of 114.52 billion yuan, a year-on-year increase of 12.9%, and net profit attributable to the parent company of 6.81 billion yuan, a year-on-year increase of 59.9%. The performance basically met expectations.
Deeply participate in the large-scale construction of 5g, and steadily improve the operator market. The network business of operators achieved an operating revenue of 75.71 billion yuan, a year-on-year increase of 2.29%, and the performance growth basically met the expectations. In terms of wireless products, a series of innovative products and solutions have improved network efficiency, simplified network architecture complexity, reduced network construction cost by more than 40% and improved delivery speed by 30%. The company has been commercially available at more than 900000 sites in more than 30 networks around the world; In terms of cable products, the market pattern outside China has been further improved. 5g carries the large-scale deployment of a full range of end-to-end products, and the optical network market continues to be in the lead. The end-to-end optical fiber to home FTTP solution has the highest rating in the industry; The core router has won the bid for centralized purchase of three major operators for many times. With the steady progress of 5g network construction and the change of market competition pattern, the company is expected to continue to maintain a growth trend in the operator market.
The business of government and enterprises grew rapidly, focusing on the digital transformation and upgrading of the industry. The government enterprise business realized an operating revenue of 13.08 billion yuan, a year-on-year increase of 16.03%, mainly due to the growth of operating revenue of servers, Chinese subsidiaries and so on. The scale of server and storage products has entered the leading enterprises in finance, Internet, energy and other industries. Among them, goldendb distributed database has won the first brand in the domestic database financial industry. In terms of 5g industry application private network, the company has cooperated with more than 500 partners to carry out 5g application innovation and business practice, and realized nearly 100 5g innovative application scenarios. We believe that based on the accelerated maturity of industrial applications and the full swing of digitization, the company will actively expand applications in various industries, which will bring new growth points to the company.
Terminal services continued to recover, and the layout of new services accelerated. The consumer business realized an operating revenue of 25.73 billion yuan, a year-on-year increase of 59.22%, and the business space was further opened. The company has gradually integrated mobile phones, broadband Internet, terminal chip modules and ecological capabilities to form a “big terminal” and create a whole scene intelligent ecology. The sales of 5g mobile Internet products have exceeded 30 countries and regions, the scale of home information terminals has jumped, the delivery has increased by more than 50% year-on-year, and the cumulative delivery volume is 580 million units, maintaining a leading position in the industry. The company seizes the development and change opportunities of smart home, digital energy business, mobile Internet and other products, expands the production scale, increases the support of brand, channel and market strategy, promotes the growth of product sales, and is expected to start a new engine of terminal performance growth.
Profit forecast and investment suggestions. We are optimistic about the growth opportunities of the company in the digital transformation of enterprises. Combined with the company’s annual performance report, we adjusted the predicted value of the company’s net profit attributable to the parent company from 2022 to 2024 to 8.642 billion, 10.105 billion and 11.696 billion, with corresponding EPS of 183, 214 and 2.47 yuan and corresponding PE of 13.17, 11.26 and 9.73 times, maintaining the “recommended” rating.
Risk tip: the price of raw material chips continues to rise; Global epidemic impact and foreign policy uncertainty; 5g commercial promotion is less than expected; Market competition intensifies, and the market promotion of new products is less than expected.
