\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Event: on March 23, Zte Corporation(000063) released the announcement of resumption of trading at the level of internal information announcement, and received the judgment of the Federal District Court for the Northern District of Texas, which ruled not to revoke the probation of Zte Corporation(000063) without any penalty (i.e. the probation will expire on March 22, 2022 (U.S. time)), and confirmed that the term of office of the inspector will end on March 22, 2022 (U.S. time).
Comprehensively carry out the construction of compliance system and promote the innovation and sustainable development of global ICT Industry: Zte Corporation(000063) adhere to compliance as the cornerstone and bottom line of strategic development, and comprehensively carry out the construction of compliance system. At present, the Federal District Court of the Northern District of Texas ruled that the probation of Zte Corporation(000063) will not be revoked (i.e. the probation will expire on March 22, 2022 (US time)) without any additional punishment, At the same time, confirm the end of the term of office of the Ombudsman; We believe that the external disturbance factors are gradually released, while Zte Corporation(000063) will continue to strengthen the construction of compliance system, and the business fundamentals will continue to improve. As China’s leading ICT industry leader, has significant advantages in technology, products and patents, which will further drive the performance to rise steadily.
At present, it has strengthened the core technology and solution of the whole chip industry, and has been continuously improved in the field of chip design and packaging. In the field of operating system, products have been widely used in communication, electric power, automobile rail transit and other industries. In December 2021, Zte Corporation(000063) automobile operating system products have passed the highest level iso26262asil-d product certification in the field of automobile electronic functional safety. We believe that Zte Corporation(000063) adheres to the accumulation of underlying technology, patents and experience. In the future, central communication will continue to focus on energy, transportation, finance and the Internet in government and enterprise business, At present, server and storage products have entered the leading enterprises in finance, Internet, energy and other industries; Goldendb distributed database was rated as the first brand in the domestic distributed database financial industry. It has been in commercial and stable operation in the core system of large commercial banks for more than three years, and took the lead in putting into operation the core business of large state-owned banks. At present, Zte Corporation(000063) rapidly improves the competitiveness of ICT end-to-end products and digital solutions, speeds up business expansion and tamps the second growth curve.
Profit forecast and investment rating: Zte Corporation(000063) as China’s leading ICT leader, the advantages of products and technologies continue to take the lead, the business of operators increases steadily, the contribution of government and enterprise business performance gradually increases, driving the overall performance to rise steadily. We maintain the performance expectation from 2022 to 2024. The net profit attributable to the parent company from 2022 to 2024 is 8.192 billion yuan, 9.95 billion yuan and 12.260 billion yuan respectively, and the EPS is 173 million yuan, 210 million yuan and 259 million yuan respectively, The corresponding PE valuations are 15x / 12x / 10x respectively. We are optimistic about Zte Corporation(000063) future business development and maintain the “buy” rating.
Risk tip: trade friction intensifies; Capex capital of operators began to decline; The business expansion of government and enterprises was less than expected.
