\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 728 China Telecom Corporation Limited(601728) )
Events
The company released its annual report for 2021, and achieved an operating revenue of 434159 billion yuan in 2021, with a year-on-year increase of 11.3%; The net profit attributable to the parent company was 25.952 billion yuan, a year-on-year increase of 24.4%; The weighted return on net assets was 6.7%, an increase of 0.9 percentage points year-on-year. The company plans to invest 93 billion yuan in capital expenditure in 2022, with a year-on-year increase of 7.24%, and the proportion of capital expenditure in revenue decreased by 1.2 percentage points.
Our comments are as follows:
Revenue growth accelerated, the ARPU value of 2C business increased steadily, the development of industrial digitization accelerated, the revenue was nearly 100 billion, the revenue of Tianyi cloud doubled, and the competitiveness was outstanding.
In 2021, the company’s overall revenue was 434.2 billion yuan, with a year-on-year increase of 11.3%, of which the service revenue (excluding the sale of mobile phones, smart homes and other hardware products) was 402.8 billion yuan, with a year-on-year increase of 7.8%. After excluding the impact of the sale of subsidiaries, it increased by 8.1% year-on-year, realizing the accelerated growth of revenue. Specifically: 1) mobile business revenue was 184.2 billion yuan, with a year-on-year increase of 4.9%, 372 million mobile users, 5g package penetration rate reached 50.4%, ARPU value was 45.0 yuan, with a year-on-year increase of 2.0%, and both volume and price increased; 2) Focusing on Gigabit broadband + whole house WiFi + Tianyi HD + smart home application, smart home revenue reached 113.5 billion yuan, a year-on-year increase of 4.1%, nearly 170 million broadband users, a year-on-year increase of 25.1%, and the comprehensive ARPU of broadband reached 45.9 yuan, a year-on-year increase of 3.4%; 3) Industrial digitization is deeply integrated with digital economy and real economy. 5g application is rapidly implemented, realizing an income of 98.9 billion yuan, a year-on-year increase of 19.4%, with a significant increase in growth rate; 4) Tianyi cloud achieved a breakthrough in core technology, comprehensively upgraded to distributed cloud infrastructure, operating system and product capabilities, and further strengthened its market competitiveness. Its revenue doubled to 27.9 billion yuan, ranking the first camp, IDC revenue reached 31.6 billion yuan, and its market share remained the first.
Capital expenditure investment increased moderately, operating costs continued to optimize and profitability continued to improve. While building 5g and Gigabit broadband, the company increased the co construction and sharing of 5g and 4G. The depreciation and amortization amount with the highest cost proportion increased by only 2.8% year-on-year, significantly slower than the income growth, and the network scale effect was prominent. The company actively promotes digital transformation, and realizes digitization, intelligence and agility in R & D and design, production and operation, operation management and customer service. The overall operating cost is expected to be further optimized to promote the long-term continuous improvement of profitability. The company plans to invest 93 billion yuan in capital expenditure in 2022, with a year-on-year increase of 7.2%, mainly in the industrial digitization sector.
Pay attention to shareholder returns and share the company’s high-quality development achievements with investors.
The growth of the company’s income and profit is accelerated, and the cash flow is abundant. Based on the good operating conditions, the company plans to significantly increase the dividend payout rate in 2021 from about 40% in 2020 to 60%, that is, the dividend per share is 0.17 yuan, which is about 4.2% based on the current stock price. In the next three years, the company plans to gradually increase the dividend payout rate to 70%, which is expected to share high-quality development achievements with investors for a long time.
Investment advice and profit forecast
The fundamentals of C-end business are all good, ARPU value rises steadily, and 5g penetration continues to grow. The growth of b-end business is accelerated, and the core advantages of network resources, technology reserve, talent team and data security are brought into full play in the field of industrial digitization and 5g application. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 30.4 billion yuan, 35.4 billion yuan and 41.3 billion yuan respectively, corresponding to 12 times of P / E in 22 years, 10 times of P / E in 23 years and 0.84 times of P / b. the rating of “overweight” is reiterated.
Risk warning: the price pressure of industry competition exceeds expectations, the progress of new business does not meet expectations, and the policy risk
