\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Event description:
The company received the court’s judgment on March 22, 2022 (U.S. time), ruled not to revoke Zte Corporation(000063) ‘s probation (i.e. the probation will expire on March 22, 2022 (U.S. time) without any penalty, and confirmed that the term of office of the inspector will end on March 22, 2022 (U.S. time).
Event comments:
The five-year compliance observation period of the company ended, and the external disturbance factors were gradually eliminated. We believe that this judgment is the result of the company’s adherence to compliance operation for many years. The company is committed to building a world-class compliance enterprise and adheres to taking compliance as the cornerstone of strategic development and the bottom line of operation. The end of the compliance observation period is conducive to the company’s continuous improvement of overseas market share and actively promote the innovation and sustainable development of the global ICT industry.
The company’s performance increased significantly and the gross profit margin improved significantly. The company deepened steady operation and continuously optimized the market pattern.
In 2021, the operating income was 114.52 billion yuan, a year-on-year increase of 12.9%, the net profit attributable to the parent company was 6.81 billion yuan, a year-on-year increase of 59.9%, and the basic earnings per share was 1.47 yuan.
The revenue of China, international market and three major businesses increased year-on-year. The gross profit margin was 35.24%, a year-on-year increase of 3.63 percentage points. The increase in gross profit margin was due to the improvement of business profit margin of operators.
The company’s consumer business increased by 59.22% year-on-year, and its product sales have exceeded 30 countries and regions. The scale of home information terminals jumped, and the delivery increased by more than 50% year-on-year, continuing to maintain the global leading position. Diversified business layout is expected to open the second growth curve and achieve leapfrog development towards the world’s top 500.
The operator’s business “fixed capital”. The company has deeply participated in the large-scale construction of 5g in China, continuously optimized the overseas products and market pattern, maintained the steady growth of network business of operators, and maintained the basic development of the company.
Government and enterprise businesses are committed to becoming “road builders of digital economy” and enabling thousands of industries with ICT technology. We will strengthen the expansion of key industries, strengthen channel competitiveness, focus on advantageous products, and expect to achieve rapid growth.
In the field of consumers, the company is committed to creating a full scene intelligent ecology and vigorously expanding consumer oriented home intelligent products. At the same time, the company increased brand and channel construction and continued to promote sales growth.
The company integrated and established the digital energy products business department, strengthened the operation of power supply, IDC and other products, and actively expanded the new energy business. At the same time, an automotive electronic product line has been established to help the intelligent development of the automotive field.
Investment suggestions:
We expect the operating revenue of the company from 2022 to 2024 to be 131.2 billion yuan, 150.1 billion yuan and 173 billion yuan respectively, and the net profit attributable to the parent company to be 8.14 billion yuan, 9.61 billion yuan and 10.93 billion yuan, corresponding to PE of 14.74x, 12.48x and 10.98x. Maintain the “buy” rating.
Risk tips:
Operator investment slows down; The epidemic caused the growth of overseas business to be lower than expected.
