\u3000\u30 China Baoan Group Co.Ltd(000009) 38 Unisplendour Corporation Limited(000938) )
Core view
The business maintained steady growth in 2021, basically in line with expectations. In 2021, the company achieved revenue of 67.6 billion yuan (year-on-year + 12.6%); The net profit attributable to the parent company was 2.148 billion yuan (year-on-year + 18.5%), and the net interest rate attributable to the parent company was 3.18%, which was basically the same. Among them, 21q4: the company’s revenue is 20 billion yuan (year-on-year + 9%), the net profit attributable to the parent is 546 million yuan (year-on-year – 5%), and the net interest rate attributable to the parent is 2.7%. The performance is basically in line with expectations.
The company adjusted some accounts according to the new accounting standards and retroactively adjusted the statements of comparable periods. According to the caliber before adjustment, the revenue and net profit attributable to the parent company in 2020 were 59.7/1.895 billion yuan respectively, with a year-on-year increase of + 13.3% / 13.4%.
Cloud and ICT business performed well and continued to break through operators and overseas markets. In 2021, the company’s ICT business continued to develop and maintained a good growth trend as a whole. The annual ICT business revenue was 41.3 billion yuan, a year-on-year increase of + 25%; It distribution business was 30.9 billion yuan (year-on-year + 1.1%). Xinhua III, the main subsidiary of ICT business, had an annual revenue of 44.351 billion yuan (year-on-year + 20.52%), and a net profit of 3.434 billion yuan (year-on-year + 22.24%). The business revenue of Chinese enterprises reached 36.258 billion yuan, a year-on-year increase of + 22.56%; The business of Chinese operators reached 6.415 billion yuan, a year-on-year increase of + 13.04%; The international business revenue was 1.678 billion yuan. Ziguangyun achieved a revenue of 1.009 billion yuan, a year-on-year increase of + 67.84%, a net profit attributable to the parent company of -91 million yuan, and a year-on-year decrease in loss of 43.55%.
The company’s server share further increased, and network products maintained a leading position. In 2021, China’s enterprise WLAN ranked first in the market for 13 consecutive years; Ethernet switches rank second in the market in China; In China, the market share of enterprise network routers increased to 31.3% from 30.8% last year, ranking second in the market; The overall share and share of the server market further increased to the top two.
The cost rate remained basically stable, and attention was paid to R & D investment. In 2021, the rate of management, sales and R & D expenses of the company was basically the same as that of last year. The company continued to focus on technological innovation, and invested 4.881 billion yuan in R & D expenses throughout the year (4.276 billion yuan in 2020). R & D personnel accounted for more than 40% of the total employees of the company.
Continue to consolidate the ability of comprehensive solutions and help the transformation of social digital economy. In 2021, the company’s network, server, cloud computing and international market logic have been preliminarily verified. The driving force in 2022 comes from: 1) higher market share of network products with high gross profit; 2) Cloud business continues to grow; 3) Continue to improve the company’s comprehensive competitiveness in the operator market and open up the growth space of overseas market; 4) Further enhance the profitability of the company by providing a comprehensive digital transformation scheme with high added value.
Risk tip: chip supply is limited; The expansion of network products was less than expected.
Investment advice: maintain the profit forecast and maintain the “buy” rating.
We maintain the profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 78.3/900100.3 billion yuan (year-on-year + 16% / 15% / 14%), and the net profit attributable to the parent company will be 2.7/34/4.2 billion yuan (year-on-year + 27% / 26% / 22%). The current share price corresponds to PE of 20 / 16 / 13 times. We are optimistic about the company’s comprehensive solution ability in digital transformation services for a long time. The current valuation has a high cost performance and maintains the “buy” rating.
