\u3000\u30 China Baoan Group Co.Ltd(000009) 77 Inspur Electronic Information Industry Co.Ltd(000977) )
Event: on April 8, 2022, the company released its annual report for 2021, realizing an operating revenue of 67.048 billion yuan, a year-on-year increase of 6.36%; The net profit attributable to shareholders of listed companies was 2.003 billion yuan, a year-on-year increase of 36.57%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 1.797 billion yuan, a year-on-year increase of 27.56%, in line with market expectations.
The performance in 2021 is in line with expectations, and the leading position of servers is stable. 1) In 2021, the company achieved a total operating revenue of 67.048 billion yuan, a year-on-year increase of 6.36%, in line with market expectations; Among them, the revenue from servers and components was 64.342 billion yuan, a year-on-year increase of 4.02%; The revenue of it terminals and spare parts was 2.458 billion yuan, a year-on-year increase of 160.70%. 2) According to IDC statistics, the server industry developed steadily during the reporting period. The sales volume in the Chinese market increased by 12.7% year-on-year to 163.2 billion yuan, and the shipment volume increased by 8.4% year-on-year to 3.91 million units. Among them, Inspur Electronic Information Industry Co.Ltd(000977) server products continued to lead the Chinese market with a market share of 30% + and ranked the top two in the world in 2021; 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%; According to Q4 data of synergy in 2021, Inspur Electronic Information Industry Co.Ltd(000977) server ranked first in the global public cloud infrastructure computing market share for 11 consecutive quarters.
The overall cost is stable, the cost control is good, and the R & D investment is continuous. 1) During the reporting period, the gross profit margin of the company’s sales was about 11.44%, a decrease of 0.34 percentage points compared with the same period of last year, maintaining stability. In terms of net interest rate, the net interest rate attributable to the parent company during the reporting period was about 2.99%, an increase of 0.66 percentage points over the same period last year, mainly benefiting from good expense control. 2) In terms of expenses, during the reporting period, the company realized sales expenses of 1.461 billion yuan, a year-on-year decrease of 21.64%; The proportion of income was 2.18%, down 0.78 percentage points from the same period last year. The management fee was 724 million yuan, a year-on-year decrease of 11.90%; Accounting for 1.08% of revenue, a decrease of 0.22 percentage points over the same period last year. The financial expenses were RMB -61million, a year-on-year decrease of 145.43%, of which the net exchange income was about RMB -214 million (income expressed with “-“), which was mainly due to the increase in exchange income due to the impact of exchange rate fluctuations in the current period. 3) In terms of R & D investment, the company’s R & D expenditure was 2.921 billion yuan, a year-on-year increase of 10.85%; Accounting for 4.36% of revenue, an increase of 0.18 percentage points over the same period last year.
The digital economy will further boost the demand for IT infrastructure, and the landscape of cloud travel may be ready for repair. 1) On January 12, 2022, the State Council issued the notice of the 14th five year plan for digital economy development; On January 15, Qiushi published an article “constantly strengthening, optimizing and expanding China’s digital economy”. The strategic position of digital economy is unprecedented. Among them, it infrastructure is the bottom foundation of digital economy construction. Both documents list optimizing and upgrading digital infrastructure and accelerating the construction of new infrastructure as an important development direction. 2) In terms of global environment, the cloud revenue of overseas technology giants in 2021q4 continues to increase, the AWS revenue still reaches about 40% year-on-year, the capital expenditure is expected to be significantly better in 2022, and the infrastructure investment is expected to further increase; The growth rate of Intel DCG continues to pick up, with a year-on-year growth rate of 20% in 2021q4, the highest point in nearly six quarters. Icelake was released in April 2021, which is expected to promote the upgrading of servers. The year-on-year growth rate of aspeed’s monthly revenue has rebounded sharply since August 2021, both of which remain at more than 30%. 3) For China, according to IDC statistics, in 2019, China’s overall cloud computing market, including cloud services, cloud related services and cloud infrastructure construction, reached US $32.9 billion. It is expected that the market will reach more than US $100 billion in 2024. In terms of industry application, stimulated by the epidemic, the Internet industry driven by video, games and e-commerce has promoted the rapid growth of the public cloud service market; Government, medical, education, manufacturing, services and other non internet industries have also seen the important role of cloud computing in business digital transformation, which will accelerate the full application of cloud computing, and the overall penetration of cloud computing in China is unstoppable. For public cloud enterprises, Alibaba cloud’s 2021q4 revenue still maintained a relatively high growth rate, with a year-on-year growth rate of 21%; Alibaba’s 2021q4apex increased significantly, with a year-on-year growth rate of 128%. With China’s Internet governance gradually entering a stable period, the demand for cloud deployment is expected to be released steadily. 4) On the whole, from the second half of 2020 to the end of 2021, the overseas epidemic showed a long tail, the global economic growth was sluggish, and the investment in cloud upstream entered a digestion cycle of about two years; From the end of 2021, the recovery signals of cloudy upstream appear frequently; In 2022, the penetration of cloud computing is unstoppable, the demand for Cloud Computing in various industries is still strong, and Internet governance is expected to gradually enter a stable period. We believe that the demand of the server industry is expected to rebound gradually, and the prosperity of the industry may be significantly repaired.
Maintain the “buy” rating. According to key assumptions, it is estimated that the operating revenue from 2022 to 2024 will be 77.297 billion yuan, 87.584 billion yuan and 98.459 billion yuan respectively, and the net profit attributable to the parent company will be 2.536 billion yuan, 3.204 billion yuan and 4.091 billion yuan respectively. Maintain the “buy” rating.
Risk warning: downstream demand slows down; Intensified competition in the server industry; Escalation of trade friction; Bad debt risk.
