\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 728 China Telecom Corporation Limited(601728) )
Event: the company released the annual report of 2021. In 2021, the company achieved an operating revenue of 434.2 billion yuan, a year-on-year increase of 11.3%. Among them, the service revenue was 402.8 billion yuan, a year-on-year increase of 7.8%. EBITDA 123.9 billion yuan, an increase of 4.2%. The net profit attributable to the parent company was 25.952 billion yuan, a year-on-year increase of 24.4%. The company also announced a dividend of 0.17 yuan per share, with a dividend ratio of 60%.
The C-end business stabilized and rebounded, and the number of 5g users increased significantly. In 2021, the company’s mobile business revenue was 184.2 billion yuan, a year-on-year increase of 4.9%, and the fixed network and smart home business revenue was 113.5 billion yuan, a year-on-year increase of 4.1%. In terms of the number of users, the company will have a net increase of 21.41 million mobile users and more than 100 million 5g package users in 2021. Mobile business arpu45 yuan, an increase of 2%. We believe that with the full cultivation of traffic consumption habits, the rise of 5g penetration rate and the slowdown of the pace of raising speed and reducing fees, the stabilization and recovery trend of the company’s C-end business will continue to provide strong security support for the company’s future revenue and profits.
The cloud revolution reform accelerated, and the company’s b-end revenue continued to increase. In 2021, the company’s industrial digital revenue was 98.9 billion, a year-on-year increase of 17.8%. The company’s b-end business income scale is leading in the industry. In 2021, the company continued to promote the cloud revolution strategy, deeply integrated the elements of digital economy and real economy, and built a scenario solution of comprehensive intelligence by focusing on “integrating cloud, security, 5g, digital and intelligence”. In 2021, Tianyi cloud was fully upgraded to distributed cloud, and its revenue doubled to 27.9 billion yuan. The IDC business of the company continues to remain the first in the industry, reaching 31.6 billion yuan.
Capital expenditure increased slightly in 2022, and the focus shifted from 5g to b-end development. In 2021, the company’s capital expenditure was 86.7 billion yuan, of which 5g capital expenditure was 38 billion yuan, accounting for 43.8%. The company plans to spend 93 billion yuan of capital expenditure in 2022, including 34 billion yuan of 5g capital expenditure. In 2022, the company will invest a greater proportion of capital expenditure in industrial digital business development, and the capital expenditure of this kind of business will increase by 62% year-on-year. Among them, IDC’s capital expenditure was 6.5 billion yuan, 45000 new racks, 14 billion yuan of computing power investment, and 160000 new cloud servers
The 2022 performance guidance is strong and the company is confident in its future development. According to the company’s 2022 guidelines, the company aims to achieve a net increase of 15 million mobile users, 80 million 5g package users and 8 million broadband users in 2022, strive to maintain the growth rate of industrial digital revenue in 2021 (17.8%), and strive to achieve double-digit growth in operating revenue and comparable net profit. Looking at the financial reports in recent years, this guideline is the first time that the company has given a more specific growth target, which shows the company’s strong confidence in the subsequent C-end and b-end business growth and the company’s operation.
Investment suggestion: maintain the “buy” rating. We expect the company’s revenue to be 4799 / 5321 / 563.9 billion yuan in 2022 / 2023 / 2024 and the net profit attributable to the parent company to be 28.7/313/34.2 billion yuan. With the rise of dividend yield and the upward inflection point of the company’s operation, the company’s valuation space is expected to be further opened.
Risk tip: 5g progress does not meet expectations and market competition intensifies.
