\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 138 Foxconn Industrial Internet Co.Ltd(601138) )
[key investment points]
The company's performance grew steadily in 2021. According to the company's annual report of 2021, the company realized a revenue of RMB 439557 billion in 2021, a year-on-year increase of 1.80%, and a net profit attributable to the parent company of RMB 20 billion, a year-on-year increase of 14.80%. During the reporting period, the company actively responded to the impact of the epidemic and the shortage of materials in the supply chain. Cloud computing business, communication and mobile network equipment business, and industrial Internet business all maintained good and positive growth.
Cloud computing business reached a new high, and the company's total server sales remained a global leader. In 2021, under the background of epidemic and shortage of supply chain materials, the company's cloud computing business revenue increased by 1.36% year-on-year to 177694 billion, with a gross profit margin of 4.14%. The acceleration of digital transformation and the rise of new applications such as edge computing applications and automatic driving have promoted the vigorous development of the global cloud computing market and the strong demand for cloud services. According to IDC's global cloud infrastructure hardware expenditure report in September 2021, the global cloud infrastructure hardware expenditure will increase from US $128.2 billion to US $168.1 billion from 2020 to 2024, with a compound annual growth rate of 6%.
The business scope of communication and mobile network equipment continued to expand. In 2021, the company's communications and mobile network equipment business achieved a revenue of 258966 billion yuan, with a year-on-year increase of 4%. The scale of revenue reached a record high, with a gross profit margin of 10.83%. The company's layout in the field of 5g related equipment includes products such as base station router, 400g switch, base station Ru, 5g module and open ran scheme. In 2021, the company's mobile router product shipments exceeded one million sets, maintained rapid growth, and WiFi 6 / 6e related products shipped 30 million sets. The increasing demand for network infrastructure in new fields and concepts such as smart cars and metauniverse will also drive the continuous growth of communication equipment. In addition, the company has always maintained a leading position in the industry in smart phones, smart homes and other product lines. In 2021, the overall shipment of smart home devices continued to exceed 100 million units, of which the shipment of Ott streaming video and audio devices exceeded 60 million units, ranking first in the world.
Industrial Internet business continues to help the transformation and upgrading of manufacturing industry. Based on its own Beijing Vastdata Technology Co.Ltd(603138) advantages and the application of digital technology, the company strengthens data-driven through edge computing, cloud computing, remote operation and control, and realizes its own digital transformation of intelligent manufacturing. For large and benchmark enterprises in the industry, provide the overall solution of Lighthouse factory with "lighthouse factory + Digital Manufacturing Platform" as the core. The industrial Internet business achieved a revenue of RMB 1.685 billion in 2021, with a year-on-year increase of 16.90% and a gross profit margin of 43.87%. The company actively expands the construction of industrial Internet and promotes the intelligent and lean upgrading of industrial chain.
Actively expand industrial layout and seize opportunities in semiconductor, new energy vehicles, metauniverse and other fields. In the strategic direction, the company will combine the existing operation advantages, grasp the development opportunities, accelerate the layout of the upstream semiconductor industry, build an integrated industrial chain, and focus on the fields of advanced packaging and testing, EDA software, and chip design. In the field of new energy vehicles, with profound precision manufacturing technology, the company focuses on electric drive, electronic control, intelligent vehicle and vehicle networking. In the field of metauniverse, the company will continue to consolidate its advantages in the field of new infrastructure construction of digital economy, continue to make diversified applications in the industrial field, and create an "industrial metauniverse" with the construction scheme of "lighthouse factory". Promote the coordinated development of meta cosmic infrastructure and industrial applications.
[investment suggestions]
The company has obvious head effect in cloud computing, communication and mobile network equipment business. The industrial Internet business actively promoted based on its own manufacturing experience and digital integration is also continuously expanding its application fields. In 2021, a "lighthouse factory" evaluated by the world economic forum will be added. In addition, relying on its advantages in manufacturing capacity, the company has comprehensively expanded its industrial layout, grasped industrial development opportunities in the fields of semiconductors and new energy vehicles, and created a second growth curve. It is estimated that the revenue from 2022 to 2024 will be 464958 billion yuan, 491322 billion yuan and 518948 billion yuan respectively, the net profit attributable to the parent company will be 22.164 billion yuan, 23.973 billion yuan and 25.939 billion yuan respectively, the corresponding EPS will be 1.12, 1.21 and 1.31 yuan / share respectively, and the corresponding current PE will be 9, 8 and 8 times respectively, so it is rated as "overweight".
[risk tips]
Downstream demand is lower than expected
Deterioration of industry competition pattern
Upstream raw material prices continued to rise
