\u3000\u3 China Vanke Co.Ltd(000002) 396 Fujian Star-Net Communication Co.Ltd(002396) )
Event:
The company announced that the net profit attributable to the parent company in 22q1 is expected to be 119147 million yuan, with a year-on-year increase of 200% – 270%; The net profit after deducting non-profit was 96 million yuan to 142 million yuan, with a year-on-year increase of 440% – 700%
Our comments are as follows:
1. 22q1 hit another record high, and the company can expect to continue high growth
The median value of Q1 performance forecast of the company was 133 million yuan (+ 235%), and the median value of deducted non performance was 119 million yuan (+ 570%), exceeding market expectations. From the company’s historical statements, the company’s operating performance has obvious seasonal periodicity. Q1 belongs to the off-season and investment period. The performance of 21q1 reached a new high of 39.65 million yuan, and 22q1 continued to achieve substantial growth and hit a new record.
2. Switch white box + traffic growth drives the rapid development of network product business. We believe that the substantial growth of Q1 performance of the company is mainly driven by Ruijie network, a subsidiary, and other business lines are expected to grow steadily. The rapid growth of network equipment is due to the recovery of the market on the one hand; On the other hand, the layout of white brand switches in Ruijie data center is early. After breaking through major Internet customers such as Alibaba, Tencent and byte, the company has ushered in continuous volume, and the market share of operators has increased. The market share of switches in China’s data center has increased from 6.46% in 2018 to 14.30% in 2020. Among them, the company’s data center switch revenue of Alibaba and China Mobile has continued to show a high growth trend in recent years. We believe that in the future, with the continuous release of cloud computing customer demand, as a Chinese Ethernet switch and enterprise WLAN top3 manufacturer, the company is expected to deeply benefit from the growth of industry demand and the improvement of switch white box penetration, and the network products are expected to maintain a rapid growth trend.
3. Strong growth momentum in the future, and continue to pay attention to the main products of cloud computing / ICT
Looking ahead:
1) the growth of data traffic in China and the development demand of cloud computing drive the continuous and rapid growth of the company’s data center switch business; According to IDC’s prediction, the global data volume will increase to 175zb by 2025. At the same time, China’s digital economy and East West computing policies will also stimulate and drive the demand for network equipment;
2) the localization trend of Xinchuang drives the procurement demand of the company’s network equipment, cloud desktop and other products; According to the data of prospective industry research institute, the localization rate of Xinchuang in 2020 is higher than that in 2019, and the domestic substitution trend continues. The localization development of Xinchuang will drive the procurement demand of relevant products of the company.
3) China’s cloud desktop is expected to accelerate its penetration. IDC predicts that the compound growth rate of China’s thin passenger plane and desktop cloud terminal VDI market scale from 2021 to 2025 will be 7.2% and 8.2% respectively. The company’s desktop cloud terminal VDI market accounted for the first in China (share 20.3%), and the thin client market accounted for the first in Asia Pacific (share 34.8%), and achieved ten consecutive titles. As a leading manufacturer in the field, it will deeply benefit from the improvement of desktop cloud penetration.
Profit forecast and investment suggestions:
On the whole, the company belongs to cloud computing + Xinchuang target with strong ICT competitiveness at the cloud management end, and will benefit from traffic growth, white box trend and localization development of Xinchuang in the long term. Benefiting from the continuous growth of China’s traffic and the development of cloud computing, the net profit of the company for 22-24 years was raised to 700 million, 850 million and 1 billion yuan (the original value was 680 million, 820 million and 990 million yuan), corresponding to 16x and 13X in 22 and 23 years respectively, and the “overweight” rating was reiterated.
Risk tips: the cost reduction and efficiency increase are slower than expected, the impact of the global epidemic is higher than expected, the penetration of cloud products is lower than expected, the market competition is higher than expected, the performance forecast is the company’s preliminary accounting, and the actual situation is subject to the first quarter report
