\u3000\u30 China Baoan Group Co.Ltd(000009) 38 Unisplendour Corporation Limited(000938) )
Event: the company released its 2021 annual report on March 25. In 2021, the company achieved an operating revenue of 67.638 billion yuan, a year-on-year increase of 12.57%; The net profit attributable to the parent company was 2.148 billion yuan, a year-on-year increase of 18.51%.
The revenue and gross profit margin continued to improve, and the operation quality improved steadily. In 2021, the company achieved an operating revenue of 67.638 billion yuan, a year-on-year increase of 12.57%, of which the ICT infrastructure and service business achieved a revenue of 41.348 billion yuan, a year-on-year increase of 24.81%, accounting for 61.13% of the operating revenue. The IT product distribution and supply chain service business developed steadily, and the overall revenue structure of the company continued to be optimized. In 2021, the overall gross profit margin of the company was 19.52%, of which the gross profit margin of ICT infrastructure and service business reached 25.67%, and the gross profit margin of IT product distribution and supply chain service business reached 7.90%. We believe that in the future, as the company continues to strengthen research and development, improve the technical content of products and services, strengthen refined management and improve personnel work efficiency, the gross profit margin of the company is expected to increase steadily.
It has a full range of key software and hardware products required for the construction of a new generation of information infrastructure, and the market share of network, computing, storage, security, cloud computing and other products is in the forefront. According to IDC, Gartner and Jishi information, in 2021, the company’s Ethernet switch market share in China was 35.2%, ranking second in the market; In China, the market share of enterprise network routers increased to 31.3% from 30.8% last year, ranking second in the market; In China, the market share of enterprise WLAN is 28.4%, ranking first in the market for 13 consecutive years; In China, the market share of X86 server increased from 15.4% in the previous year to 17.4%, ranking second in the market; The storage market share in China is 12.6%, ranking second in the market; The market share of security hardware in China is 9.0%, ranking second in the market; In 2021q3, the market share of super integration in China was 20.5%, and the market share rose to the first; In 2021h1, the market share of it unified operation and maintenance software in China was 13.3%, and continued to rank first in market share; From 2016 to 2020, it ranked first in China’s SDN (software) market share for five consecutive years; From 2016 to 2020, it has maintained the first market share in China’s cloud management platform market for five consecutive years.
Relying on the holding subsidiary Xinhua 3, expand the market field and continue to serve the government and enterprises, operators and overseas markets. Xinhua III has a deep accumulation in the government and enterprise market, focusing on the layout of digital transformation solutions in 18 industries, and participated in the writing of 31 industry standards in 6 industries. Xinhua 3 operators have strong business strength, fully serve the three business scenarios of operators’ backbone network, metropolitan area network and 5g bearer network, deeply participate in the construction of 6 Wuhan Department Store Group Co.Ltd(000501) provinces and more than 100 prefectures and cities’ intelligent metropolitan area network, realize large-scale deployment in the cloud backbone private network of 7 provinces of China Mobile, and the cumulative large-scale deployment in China Telecom Corporation Limited(601728) 5gstn bearer network covers 20 provinces and more than 90 prefectures and cities. Xinhua 3’s overseas business showed a good growth trend. By the end of 2021, there were 12 overseas subsidiaries and 830 certified overseas partners. It has established spare parts centers in 24 countries and regions, with service delivery covering 135 countries, and continued to provide high-quality products and services to customers all over the world.
Build the core competence of “cloud intelligence native” and continuously upgrade ICT infrastructure and services. The company has a comprehensive and in-depth layout of the “core cloud network edge end” industrial chain, and has the ability of vertical integration of the whole industrial chain and vertical technology from general-purpose products to industry-specific products, from core chips to system machines, to data platforms, to cloud applications. The company has the overall capacity of ICT infrastructure in all aspects such as computing, storage, network, 5g, security and terminal, and can provide one-stop digital solutions including cloud computing, big data, artificial intelligence, intelligent connection, industrial Internet, information security, new security, Internet of things and edge computing. Under the guidance of the “cloud intelligence native” strategy, Ziguang cloud 3.0, a new cloud and intelligent platform created by Ziguang cloud, a holding subsidiary, realizes the complete isomorphism of public cloud and private cloud technology and architecture, can meet the needs of multi cloud distributed deployment, unified management and consistent experience, and provides 16 categories and more than 300 cloud services. At present, Ziguang cloud has built 43 nodes nationwide, covering 22 provinces, including 8 self built nodes, 11 joint venture nodes, and 24 government cloud and exclusive cloud nodes.
Continue to maintain high R & D investment and improve the core competitiveness of technologies, products and solutions. Taking technological innovation as the core engine, the company has continuously increased its R & D investment in cloud computing, big data, information security, Internet of things, storage, 5g and industrial applications. In 2021, the company’s R & D investment reached 4.881 billion yuan, a year-on-year increase of 14.15% and the R & D expense rate reached 6.4%. There are R & D centers in Beijing, Hangzhou, Hefei, Zhengzhou, Chengdu, Chongqing, Guangzhou and other places, with many R & D teams with rich experience and excellent technical ability. The company has 7018 R & D personnel, accounting for 40.93% of the total employees. The company has accumulated more than 12000 patent applications, of which more than 90% are invention patents. The leading core technology and outstanding innovation ability will continue to improve the company’s core competitiveness and lay a solid foundation for the company’s high-quality development.
Investment suggestion: the company is a leading enterprise in the field of ICT. It has leading digital technology and a full range of key software and hardware products required for the construction of a new generation of information infrastructure. It continues to focus on the three major markets of Chinese enterprise business, Chinese operator business and international business, and its fundamentals are improving in an all-round way. We expect that the company’s revenue from 2022 to 2024 will be 79.7/93.1/107 billion yuan respectively, and its net profit will be 2.7/33/3.9 billion yuan respectively, corresponding to eps0.5 billion yuan 95 / 1.17/1.38 yuan, with outstanding growth. Give 21 times PE in 2023, corresponding to the 6-month target price of 24.57 yuan, and maintain the investment rating of buy-a.
Risk tips: macroeconomic environment change risk, technology and product R & D risk, operation risk and human resource risk
