\u3000\u30 China Baoan Group Co.Ltd(000009) 77 Inspur Electronic Information Industry Co.Ltd(000977) )
In 2021, the profit side increased by 37% with full growth toughness Inspur Electronic Information Industry Co.Ltd(000977) released its 2021 annual report on the evening of April 8, with an annual operating revenue of 67.048 billion yuan, a year-on-year increase of 6.36%; The net profit attributable to the parent company was 2.003 billion yuan, a year-on-year increase of 36.57%; The net profit after deducting non-profit was 1.797 billion yuan, a year-on-year increase of 27.56%.
Good growth was achieved under the high base, and the revenue of Q4 exceeded 20 billion yuan in a single quarter. In the context of the high performance base brought by the “online economy” in the first half of 2020, Inspur still maintained a good growth trend in 2021, with an annual operating revenue of 67.048 billion yuan, an increase of 6.36% at the same time. Among them, the single quarter revenue of 21q4 exceeded the 20 billion yuan mark and reached 20.8 billion yuan, with a year-on-year increase of 18.62%. According to the latest data of IDC, Inspur Electronic Information Industry Co.Ltd(000977) ‘s server products ranked second in the world in 2021 and continued to lead the Chinese market with a market share of 30% +; In the first half of 2021, the market share of Inspur Electronic Information Industry Co.Ltd(000977) the AI server products ranked first in the world, with a market share of more than 20%. The continuous construction of digital infrastructure and the continuous implementation of AI server applications provide a strong guarantee for the growth of the wave.
The scale effect continues to be realized, and the cost rate continues to decline. With the continuous growth of the company’s revenue scale and shipment volume, the cost rate caused by the scale effect decreases, which makes the company grow faster on the profit side than on the revenue side. In 2021, the year-on-year growth rates of the company’s net profit attributable to the parent company and net profit deducted from non parent company were 36.57% and 27.56% respectively, higher than the growth rate of 6.36% at the revenue end. Specifically, the gross profit margin of 21 years was 11.44%, basically the same as last year. The profit elasticity was mainly due to the decline of sales rate and management rate. In 2021, the sales rate and management rate were 2.18% and 1.08% respectively, with a year-on-year decrease of 0.78 and 0.22pct. The R & D investment maintained a steady growth. In 2021, the R & D cost was 2.921 billion yuan, a year-on-year increase of 11%, and the R & D rate was 4.4%. Thanks to the control of expense rate, the net interest rate attributable to the parent company in 2021 was 2.99%, with a year-on-year increase of 0.66pct.
Under the background of shortage of raw materials, we will strengthen the preparation of goods, and the 22-year growth driven by the digital economy can be expected. The supply of chips and components was tight in 2021. In order to ensure product supply, the company increased the stock of raw materials. The inventory scale in the balance sheet in 2021 was 22.4 billion yuan, an increase of 105% over the beginning of the year, including 17.1 billion yuan of raw materials, an increase of 173% over the beginning of the year. The substantial purchase of raw materials also led to the outflow of the company’s operating net cash flow in 21 years, with an annual net cash flow of -8.29 billion yuan. However, looking forward to 2022, under the guidance of setting the tone of “digital economy” and starting the project of “computing from the east to the west”, the IT infrastructure represented by servers is expected to usher in a new round of construction cycle, and the growth of the company is worth looking forward to.
Investment suggestion: it is estimated that the net profit attributable to the parent company in 22-24 years is RMB 2.317 billion, RMB 2.699 billion and RMB 3.061 billion respectively, and the current market value corresponds to 16 / 14 / 12 times of PE in 22-24 years. Inspur is a global server leader and is expected to fully benefit from the increase of global Internet capital expenditure and the dividend of China’s “digital economy” construction. If CITIC computer equipment industry is selected as a comparison, the corresponding PE of computer equipment sector in 2022 is 32 times under the unanimous expectation of wind, and the company is still underestimated as an industry leader. Therefore, the “recommended” rating is maintained.
Risk warning: the construction of digital economy is not as expected; The capital expenditure of Internet companies is lower than expected; The improvement process of raw material supply pattern is less than expected
