\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 728 China Telecom Corporation Limited(601728) )
Sustained high-quality growth, and the 2022 guidelines reflect confidence
In 2021, the company’s operating revenue was 434.2 billion yuan, an increase of 11.3% year-on-year; The service revenue was 402.8 billion yuan, a year-on-year increase of 7.8%, an increase of 2.3pct compared with the year-on-year growth rate of 4.5% in 2020; The net profit attributable to the parent company was 26 billion yuan, a year-on-year increase of 24.4%; The performance is in line with expectations and continues to grow with high quality.
The company aims to achieve double-digit growth in operating income and comparable net profit in 2022 (H-share caliber).
Mobile business: driven by 5g, revenue growth of 4.9%
In 2021, the mobile communication service revenue was 184.2 billion yuan, with a year-on-year increase of 4.9%, an increase of 1.4pct compared with 3.5% in 2020. The net increase of users was 21.41 million, which continued to be the industry leader for four years, significantly exceeding 15.45 million in the whole year of last year, and the target net increase of 15 million in 2022.
5g package users increased by 101 million to 188 million, with a penetration rate of 50.4%, 25.8pct higher than the penetration rate of 24.6% at the end of 2020, 5g user ARPU reached 53.3 yuan, 5g user Dou reached 24.1gb in December 2021 (mobile user dou13.4g in 2021), effectively driving the year-on-year increase of comprehensive ARPU by 2.0% to 45 yuan, the total mobile Internet traffic increased by 35.4%, the mobile Internet revenue increased by 7.4%, and the target net increase of 5g package users in 2022 was 80 million.
Government and enterprise business: accelerate growth, Tianyi cloud increased by 102%
In 2021, the business income of industrial digitization was 99 billion yuan, with a year-on-year increase of 19.4%, a growth rate of 9.6pct compared with 9.8% in 2020. The contribution of industrial digitization to incremental service income was 51.6%, a year-on-year increase of 5.7pct, accounting for 24.6% of service income, a year-on-year increase of 2.1pct, and the goal is to further increase to more than 30% in the next three years.
Tianyi cloud comprehensively upgraded, carried out equity diversification reform, and signed capital and share increase framework agreements with four large state-owned enterprises. According to the financial Associated Press, the company said it would actively explore the possibility of Tianyi cloud’s spin off and listing under the condition of meeting regulatory rules. In 2021, the revenue of Tianyi cloud was 27.9 billion yuan, with a year-on-year increase of 102%, and the market share of public cloud IAAs + PAAS increased by 9.0% by 1.6pct. In 2021, the number of IDC racks for external services increased by 50000 to 470000, and the revenue of IDC was 31.6 billion yuan, with a year-on-year increase of 13%. The goal is to add 45000 IDC racks and 160000 cloud servers in 2022, and the computing power scale will reach 3.8eflops in 2022, more than 80% higher than 2.1eflops in 2021.
In terms of 5g2b, the company built about 200 benchmark projects in 2021, and has implemented more than 1200 5g customized network projects. It aims to implement 15002000 customized network projects in 2022, so as to achieve full-depth coverage of 15 key industries such as industry and government affairs.
The number of Internet of things connections reached 298 million, a year-on-year increase of 60.2%, and the income of Internet of things was 2.86 billion yuan, a year-on-year increase of 31.8%.
Family business: Zhijia’s income increased by 25%, accounting for 12%
In 2021, the business income of fixed network and smart home was 113.5 billion yuan, with a year-on-year increase of 4.1%, and the growth rate increased 1PCT compared with 3.1% in 2020. Among them, the income of access and smart home was 76.6 billion yuan and 13.9 billion yuan, with a year-on-year increase of 6.5% and 25.1%; In 2021, there will be a net increase of 11.18 million wired broadband users, up from 5.4 million last year, and an additional 8 million in 2022; Wired broadband arpu38 9 yuan, with a year-on-year increase of 1.3%, and the comprehensive ARPU driven by Zhijia reached 45.9 yuan, with a year-on-year increase of 3.4%.
Moderately increase investment and focus on new growth points through structural changes
In 2021, the capital expenditure of the company was 86.7 billion yuan, accounting for 21.5% of the revenue, with a year-on-year decrease of 1.2pct. In 2021, the capital expenditure of 5g was 38 billion yuan, with a year-on-year decrease of 3.1%. The number of 5g base stations in use reached 690000 by the end of 2021. It is planned that the capital expenditure of 5g in 2022 will be 34 billion yuan, with a year-on-year decrease of 10.5%. It is planned that the number of 5g base stations in use will reach 990000 by the end of 2022.
In 2022, the company’s target capital expenditure was 93 billion yuan, a year-on-year increase of 7.2%. Among the target capital expenditure in 2022, 4G / 5G network investment and industrial digitization investment are 35.1 billion yuan and 27.9 billion yuan respectively, with a year-on-year ratio of ↓ 12% and ↑ 62%, accounting for 37.7% and 30.0%, respectively. Compared with 2021, the investment planned for computing power (cloud resources) and IDC is 14 billion yuan and 6.5 billion yuan respectively.
Precise cost input, strengthen the improvement of operation efficiency
In 2021, the company’s operating cost increased by 12.9% year-on-year, mainly because the company seized the development opportunity of digital economy, increased investment in key fields and improved cost-effectiveness. Among them, the operation and maintenance and technical support fee, labor cost and energy consumption increased by 11.9%, 12.3% and 10.7% year-on-year respectively, accounting for 0.73, 0.49 and 0.11pct of service revenue respectively. Significant results were achieved in increasing 5g co construction and sharing and 4G network sharing, and the depreciation and amortization cost increased by 2.8% year-on-year, The proportion in service revenue decreased by 1.06 PCT.
In terms of expense ratio, sales expenses, management expenses and R & D expenses increased by 6.7%, 19.2% and 46.4% respectively year-on-year, accounting for ↓ 0.13, ↑ 0.77 and ↑ 0.45pct respectively.
Overall, the company’s net interest rate in 2021 was 6.02%, up 0.61pct from 5.41 in the same period last year.
Increase the dividend payout rate to 60%, or consider options such as repurchase
The board of directors proposed to pay a dividend of RMB 0.17 per share in 2021, with a dividend rate of 60% (corresponding to the current share price dividend rate of 4.2%), which is significantly higher than 40.3% in 2020. The interim dividend will be paid in 2022. Previously, the company said that within three years after the issuance and listing of a shares, the annual profit distributed in cash will gradually increase to more than 70% China Telecom Corporation Limited(601728) group plans to increase its A-share holdings within 12 months from September 22, 2021, with a proposed increase of no less than 4 billion yuan. From September 22, 2021 to March 7, 2022, China Telecom Corporation Limited(601728) group has accumulatively increased its holdings of China Telecom Corporation Limited(601728) 467 million a shares, with a cumulative increase of 2.01 billion yuan.
Sina Financial information shows that the company will fully consider the opinions of investors in the future, or will consider a variety of schemes including repurchase. Multiple measures reflect the company’s development confidence and responsible attitude towards shareholder returns.
Profit forecast and valuation
The new growth engine of the company’s industrial digitization has been gradually clarified, and the company has further significantly increased its investment, and the industrial digitization business will maintain a high growth in the future; 5g dual Gigabit pull of mobile and home business is expected to continue to maintain high-quality development; In addition, the company’s precise investment strengthens efficiency improvement; It is estimated that the revenue growth rate of the company in 202224 will be 10.5%, 10.0% and 9.5%, and the profit growth rate will be 5.5% / 10.2% / 10.3%; Maintain the “buy” rating.
Risk tip: the development of digital business in cloud and other industries is less than expected; The risk that the cost control is less than expected; The development trend of mobile ARPU is less than expected.
