\u3000\u3000 Digital China Group Co.Ltd(000034) Digital China Group Co.Ltd(000034) )
Event: on March 28, 2022, Digital China Group Co.Ltd(000034) released the annual report of 2021, and the company achieved an operating revenue of 122385 billion yuan, a year-on-year increase of 32.94%; The net profit attributable to the parent company was 238 million yuan, a year-on-year decrease of 61.86%; Deduction of non net profit was 672 million yuan, with a year-on-year increase of 3.14%. On March 25, 2022, the company approved the profit distribution plan for 2021: taking 640973710 shares as the base, the company distributed cash dividends of 1.91 yuan (including tax) to all shareholders for every 10 shares.
The gross profit rate declined slightly and the cost rate was stable. In 2021, the company's overall gross profit margin was 3.35%, a decrease of 0.55 PCT over the previous year; The net interest rate was 0.20%, down 0.48pct from the previous year, due to the non recurring loss of 477 million yuan caused by the company's sale of 19.62% equity of DiXinTong. The sales expense rate, management expense rate, R & D expense rate and financial expense rate were 1.57%, 0.23%, 0.20% and 0.22% respectively, with changes of -0.17%, 0.02 and -0.08 percentage points respectively compared with 2020.
Cloud business maintained high growth, and MSP continued to make efforts. In terms of business, cloud computing and digital transformation business realized an operating revenue of 3.885 billion yuan, a year-on-year increase of 45.71% and a gross profit margin of 13.43%, of which the cloud resale (AGG) business revenue was 3.438 billion yuan, a year-on-year increase of 44.7% and a gross profit margin of 8.4%; The revenue of cloud management service (MSP) was 344 million yuan, with a year-on-year increase of 64.5% and a gross profit margin of 43%; The revenue of digital transformation solutions (ISV) was 103 million yuan, with a year-on-year increase of 26.3% and a gross profit margin of 83%.
Double the business growth. In 2021, the independent brand business achieved an operating revenue of 1.65 billion yuan, a year-on-year increase of 126.86%. In 2021, the company successively won many benchmark projects, such as "supplementary shortlisted project of online batch centralized procurement of computer equipment by the State Administration of Taxation in 2021", "operation of Xinchuang adaptation services such as Kunpeng, Jimei District, Xiamen", "centralized procurement of artificial intelligence general computing equipment by China Mobile from 2021 to 2022". In terms of industrial layout, on the premise of taking Kunpeng computing power as the core, the company actively expands Feiteng and Godson PC product lines, completes product R & D and production and promotes them to the market. In the field of industrial investment cooperation, Hefei invested 10 billion shares at a valuation to jointly build a Xinchuang headquarters base. With the deepening cooperation between the company and many partners in the field of information innovation, the product line of information innovation is richer, the supply problem will be gradually solved, and the 22-year information innovation business is expected to usher in a turning point.
It distribution business benefits from digital transformation. The operating revenue of distribution and value-added business was 116838 billion yuan, with a year-on-year increase of 31.79% and a gross profit margin of 2.89%, of which the revenue of consumer electronics business was 67.854 billion yuan, with a year-on-year increase of 18.18% and a gross profit margin of 2.00%, and the revenue of enterprise value-added business was 48.984 billion yuan, with a year-on-year increase of 56.82% and a gross profit margin of 4.13%.
High score red actively returns investors. On March 25, 2022, the company passed the 2021 profit distribution plan, distributing cash dividends of RMB 191 (including tax) for every 10 shares and RMB 122 million to all shareholders. The company actively returns investors with high dividends, highlighting the investment value.
Investment suggestion: as a leader in China's MSP industry and an important manufacturer of servers and complete machines in the field of Xinchuang, the company is expected to continue to benefit from the trend of large volume of Xinchuang. We estimate that the operating revenue of the company from 2022 to 2024 will be 132475 billion yuan, 144515 billion yuan and 150870 billion yuan respectively, the net profit attributable to the parent company will be 906 million yuan, 1135 million yuan and 1404 million yuan respectively, and the EPS will be 137 million yuan, 172 million yuan and 212 million yuan respectively. Maintain the "buy" rating.
Risk tip: there are risks that market competition intensifies, the promotion of cloud service business is not as expected, and the promotion of new products is not as expected.
