\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 138 Foxconn Industrial Internet Co.Ltd(601138) )
Performance review
On the evening of March 22, 2022, the company released its 2021 annual report, with annual revenue of 439557 billion yuan, a year-on-year increase of 1.8%; The net profit attributable to the parent company was 20.01 billion yuan, a year-on-year increase of 14.8%; After deducting the net profit not attributable to the parent company, it was RMB 18.581 billion, with a year-on-year increase of 13.39%, and the profit was slightly higher than expected.
Business analysis
Revenue grew steadily, and industrial Internet has become the fastest growing business. During the reporting period, the company’s revenue increased by 1.8% year-on-year, of which the communication network equipment achieved a revenue of 25.897 billion yuan, an increase of 1.95% at the same time. The mobile router products grew rapidly, with a shipment of more than one million sets, 30 million sets of wifi6 / 6e related products, and more than 100 million smart home devices. Among them, the shipment of Ott streaming video and audio devices exceeded 60 million sets, ranking first in the world; Cloud computing business achieved a revenue of 177694 billion yuan, an increase of 1.36% at the same time, and the total sales of servers took the lead in the world; Industrial Internet business has become the fastest growing business of the company, with revenue of 1.685 billion yuan, an increase of 16.92% and industrial Siasun Robot&Automation Co.Ltd(300024) sales increased by 155%. By the end of 21, the company had incubated 10 internal lighthouse factories and assisted more than 50 industry leaders in digital transformation.
The scale effect of intelligent manufacturing leaders appears, and continue to increase R & D and deepen the moat. During the reporting period, the company’s sales / management expense ratio decreased by 0.29pp/0.09pp respectively. As a leading enterprise of intelligent manufacturing, the company’s scale effect continued to appear. In the 21st year, the R & D rate increased by 0.14pp. The company actively invested in R & D in cloud computing, intelligent manufacturing and other fields, and the patent reserve of cutting-edge technologies accounted for 47.9%. In terms of profitability, the gross profit margin of the company in the whole year of 21 was basically the same as that of last year, the net profit margin increased by 0.52pp, and the net profit attributable to the parent increased by 14.8%. We are optimistic about the continuous improvement of profitability of intelligent manufacturing leaders based on scale effect and increased R & D investment.
Under the main line of digital economy, we are optimistic about the horizontal and vertical development of the company’s business in the future. According to IDC’s prediction, the output value of digital economy will account for 62% of global GDP by 2023. The company has achieved full coverage of five categories of digital economy industries. In the future, it is expected to further consolidate its leading advantages in supply chain and customer resources based on scale effect, expand semiconductor, new energy vehicles, industrial Internet and other businesses horizontally based on intelligent manufacturing and investment strategy, and open the second growth curve.
Profit adjustment and investment suggestions
Combined with the latest performance of the company, we adjusted the company’s profit forecast for 22-23 years to 22.542 billion yuan (+ 7%) / 24.687 billion yuan (+ 9.2%), predicted 24-year revenue to 592684 billion yuan, net profit attributable to the parent company to 27.562 billion yuan, corresponding to 9 / 8 / 7 times of PE, and maintained the “buy” rating.
Risk tips
The progress of new business is not as expected, and the gross profit margin continues to fall.
