\u3000\u30 China Baoan Group Co.Ltd(000009) 38 Unisplendour Corporation Limited(000938) )
The annual net profit of the parent company is RMB 6.738 billion, which is in line with the expected year-on-year growth of RMB 2.857 billion on the same month, and the net profit of the next year is RMB 6.857 billion, which is controlled by the parent company on the same year-on-year basis.
In terms of business, the market share of the company’s network / computing / storage / cloud computing remains at the forefront. 1) ICT infrastructure and services: revenue was 41.348 billion yuan, a year-on-year increase of 24.81%. In 2021, the market share of switch / enterprise router / enterprise WLAN was 35.2% / 31.3% / 28.4%, ranking second / second / first in the market respectively; In computer and storage, x86 server / blade server / storage market share is 17.4% / 47.8% / 12.6%, ranking second / first / second in the market respectively; In cloud computing and cloud services, Ziguang cloud, a holding subsidiary, released Ziguang cloud 3.0 in 2021, realizing the complete isomorphism of public cloud and private cloud technology and architecture. In September 2021, China Mobile took a stake in Ziguang cloud, bringing strategic synergy in technology, resources, market and other aspects. 2) It product distribution and supply chain services: the revenue was 30.916 billion yuan, with a year-on-year increase of 1.07%. The overall revenue structure of the company continued to be optimized.
In terms of market, China’s government, enterprises and operators continue to lead the market, and the international market is growing rapidly. In 2021, the revenue of H3C brand products and services in the holding subsidiary Xinhua 3 China enterprise business, Chinese operator business and international business increased by 22.56%, 13.04% and 48.81% year-on-year. 1) China’s Government Enterprise Market: covering more than 90% of financial, power and energy enterprises, and continuously enabling the information construction, upgrading and digital transformation of customers in many industries such as government, construction, Internet, education and medical treatment. 2) China’s operator market: continuous breakthroughs have been made in the field of centralized purchase of operators, ranking first in the overall share of China Mobile’s centralized purchase of high-end routers and high-end switches from 2021 to 2022. 3) Overseas market: accelerate overseas layout, set up 12 overseas subsidiaries, service delivery covers 135 countries, and participated in finance, taxation, transportation and medical construction in Southeast Asia and other regions.
R & D investment is stable. Due to the increase of device reserves in 2021, the net operating cash flow is negative. In 2021, R & D personnel accounted for 41%, R & D investment was 4.881 billion yuan, a year-on-year increase of 14.15%, and R & D investment revenue accounted for 7.22% (13.29% if distribution business is not considered). The net operating cash flow in 2021 was -2.180 billion yuan, mainly due to the increase in the reserves of key devices of Xinhua III.
Investment suggestion: the 14th five year plan points out that the added value of core industries of digital economy will account for 10% of GDP in 2025. As an important part of cloud infrastructure construction, the cloud hardware where the company is located is expected to fully benefit. The revenue forecast for 22-23 years was raised to 81.180/97.583 billion yuan, which was + 0.3% / + 3.5% compared with the previous forecast, and the revenue forecast for 24 years was 117667 billion yuan; Due to the continuous investment in the company’s R & D and cloud business layout, the forecast of net profit attributable to the parent company for 22-23 years was reduced to RMB 2.677/3.214 billion, which was – 11.0% / – 15.3% compared with the previous forecast, and the forecast of net profit attributable to the parent company for 24 years was increased by RMB 3.902 billion. The corresponding EPS of 22-24 years is 0.94/1.12/1.36 yuan respectively, and the corresponding PE is 21x / 17x / 14x, maintaining the “overweight” rating.
Risk tip: the operator’s ICT bid winning is less than expected, and the overseas promotion is less than expected.
