\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Event:
On March 23, the trading of Zte Corporation(000063) was suspended in the morning, and then the company issued an announcement: the company received the court's judgment and ruled not to revoke the probation of Zte Corporation(000063) without any penalty (i.e. the probation will expire on March 22, 2022 (US time)), and confirmed that the term of office of the inspector will end on March 22, 2022 (US time). On the afternoon of the 23rd, the stock price rose by the limit.
Comments:
The hearing successfully lifted external concerns and the overseas business is expected to speed up the repair: according to the latest announcement, the original five-year compliance observation period will expire on March 22, 2022 (US time). From the judgment, the court ruled that the probation of Zte Corporation(000063) will not be revoked without any punishment. This also means that Zte Corporation(000063) finally won the "victory" of the above hearing. In terms of the composition of revenue over the years, the company's revenue in Europe, America and Oceania fell from 25.09% at the end of 17 to 14.96% at the end of 21, and the profit fell from 16.46% at the end of 17 to 9.50% at the end of 21. With the gradual easing of external concerns, the company is expected to accelerate the repair of overseas business.
The revenue and net profit of the company reached a new high in 21 years, and the three major businesses are expected to continue to develop: the operating revenue and net profit of the company in 2021 were 114522 billion yuan and 6.813 billion yuan respectively, with a year-on-year increase of 12.9% and 59.9% respectively; The gross profit margin was 35.2%, with a year-on-year increase of 3.6 BP, mainly benefiting from the significant improvement of the gross profit margin of the operator's business, which recovered to 42.5%, with a year-on-year increase of 8.7 BP. In the 21st year, the government enterprise business and consumer business increased by + 16.03% and + 59.22% year-on-year. It is expected to open the second growth curve in the next two years.
Profit forecast: the repair of overseas business is accelerated, and the prosperity of the industry continues to improve. With the continuous improvement of the company's gross profit margin, there will be great flexibility in future performance. We raised the company's profit forecast. From 2022 to 2023, we achieved a net profit of 8.354/9.575 billion yuan, yoy + 22.62% / + 14.61%, equivalent to EPS of 1.77/2.02. At present, the PE corresponding to the share price of A-Shares is 15 times and 13 times, and the PE corresponding to the share price of H shares is 11 times and 10 times, giving a "buy" rating.
Risk tips: 1. 5g construction progress is less than expected; 2. The conflict between China and the United States has intensified again; 3. The impact of the global epidemic on the company's overseas business.
