\u3000\u30 China Baoan Group Co.Ltd(000009) 77 Inspur Electronic Information Industry Co.Ltd(000977) )
The event company released its annual report for 2021, and achieved a revenue of 67.048 billion yuan during the reporting period, an increase of 6.36% year-on-year; The net profit attributable to the parent company was 2.003 billion yuan, a year-on-year increase of 36.57%; Net profit deducted from non parent company was 1.797 billion yuan, with a year-on-year increase of 27.56%.
The performance is in line with expectations and the cost control is reasonable. The company released its annual report for 2021, and achieved a revenue of 67.048 billion yuan during the reporting period, an increase of 6.36% year-on-year; The net profit attributable to the parent company was 2.003 billion yuan, a year-on-year increase of 36.57%; The net profit deducted from non parent company was 1.797 billion yuan, with a year-on-year increase of 27.56%, and the performance was in line with expectations. During the reporting period, the company’s expense control was reasonable, the sales expense rate and management expense rate were 2.18% and 5.44% respectively, with a year-on-year decrease of 26% and 0.7%, and the company’s net sales interest rate was 3.03%, with a year-on-year increase of 26.8%; In terms of inventory, as of the end of the period, the company’s inventory was 22.4 billion yuan, accounting for 48.48% of the total assets, with an increase of 19.97%, mainly due to the shortage of upstream raw materials and the company’s increased stock.
The industry recorded a positive momentum, the inflection point of upstream indicators was clear, and the downstream demand was boosted. In the upstream, Taiwan Xinhua technology began to accelerate its revenue growth from Q3 in 2021. Its revenue increased by 61.46% year-on-year in 2022, indicating the arrival of a new business cycle in the server industry. In addition, in 2021, the inventory turnover rate of major foundary / IDM manufacturers in the world accelerated significantly. According to the latest annual report data of 2021, TSMC, Intel and Ti increased by more than 80% compared with 2021hl. Downstream, capex, an Internet cloud giant outside China, maintained a high growth rate. The growth rate of the four overseas giants (Microsoft, Google, Amazon and meta) in 2021ql / Q2 / Q3 / Q4 was 43% 45% 37% 24%, and that of China’s bat2021q1 / Q2 / Q3 was 449% 14% 2%. Alibaba and Baidu’s Q4 capital expenditure in 2021 increased by 90.94% and 94.54% respectively year-on-year. Superimposed with the acceleration of computing power growth under the downstream digital economy, the layout of Eastern digital and Western computing, and the expectation of industry cloud promotion, we are optimistic about the demand growth of the server industry.
The company has a stable growth position and stable income. In the field of cloud computing, the company’s SR whole cabinet server has a market share of more than 60% in China. According to IDC data, in 2021, the company ranked second in the market share of the global server industry; In China’s server industry, the company is a well deserved leading manufacturer, with a market share of 35.6% in 2020, higher than the sum of Huawei and Xinhua, which ranked third, and continued to lead in 2021; In the first half of 2021, the company’s AI server ranked first in the world with a market share of 20%. The company has strong industry competitiveness and is committed to becoming a global server leading company during the 14th Five Year Plan period. It is expected that there is still several times of space.
We expect that the company’s EPS from 2022 to 2024 will be 1.61/1.86/2.14, with corresponding P / E ratios of 16 / 14 / 12 respectively. As a leading manufacturer in the server industry, the company has the advantage of card position. The demand of downstream industries will maintain a high boom and the demand will continue to release. It is optimistic about the future development of the company and maintains the “recommended” rating
The risk indicates the risk that the prosperity of downstream industries is lower than expected; Risk of shortage of upstream raw material supply and price rise; The risk that the gross profit margin and income structure cannot be improved.
