\u3000\u3 China Vanke Co.Ltd(000002) 396 Fujian Star-Net Communication Co.Ltd(002396) )
The net profit of the parent company is expected to increase by -4.4 billion yuan from Q1 to 2021, with a year-on-year increase of -2.74 billion yuan, and the net profit of the parent company is expected to be 2.47% - 2.7% from Q1 to 2021.
The performance greatly exceeded expectations and reached a record high in the first quarter
According to the median value of the forecast, the company's net profit attributable to the parent company in 22q1 was 133 million yuan, a year-on-year increase of 235%, deducting 119 million yuan of net profit not attributable to the parent company, a year-on-year increase of 570%. We have counted the financial data of the company since its listing and found that since 2015, only the net profit of Q1 in 2021 was positive, and the company's 22q1 performance greatly exceeded the market expectation, which not only hit a record high in the first quarter, but also reversed the decline of continuous losses in Q1. We think it is mainly driven by the rapid growth of revenue. At the same time, we speculate that the Q1 profit margin of the company has also improved. In the comments on the previous annual report, we mentioned that the company's contract liabilities at the end of the year were 541 million yuan, a year-on-year increase of 131.97%, which reflected that the company had sufficient orders and the long-term business trend was good. The performance of 22q1 confirmed our judgment.
The enterprise network is the leading market segment, and the diversified layout has achieved initial results
The company is a leading provider of ICT infrastructure and solutions in the industry. The company and its subsidiaries are in a leading position in multiple market segments of the enterprise network: in the field of smart network, according to IDC data, the Ethernet switch market share of Ruijie network is the third in China and the enterprise WLAN Market share is the third in China in 2021, among which the shipment volume of wi-fi6 products ranks the first; In the field of zhihuiyun, according to IDC data, in 2021, the market share of desktop cloud terminal VDI of shengteng information ranked first in China, the market share of thin client ranked first in Asia Pacific and China. Force operators to collect and actively expand overseas markets. Ruijie network won the bid for centralized purchase of China Mobile's high-end routers and high-end switches in 2019, making a breakthrough in the operator's high-end products. Since then, centralized purchase has repeatedly won the bid. In 2021, Ruijie won 30% of the shares of standard package 7 and standard package 8 in the centralized purchase of high-end routers and high-end switches by China Mobile from 2021 to 2022. In the centralized purchase of data center switches (new part) by China Mobile from 2022 to 2023, standard packages 1, 2 and 3 won 23%, 23% and 30% respectively. On April 1, 22, the company announced that Ruijie network plans to set up a wholly-owned subsidiary in Hong Kong with a total investment of 10 million yuan. We think this is an important measure for the company to enter overseas. The pilot of digital RMB is accelerated, and the performance of shengteng information is expected to pick up. The people's Bank of China announced the third batch of digital RMB pilot areas, adding six cities hosting the Asian Games in Tianjin, Chongqing, Guangzhou, Fuzhou, Xiamen and Zhejiang Province as pilot cities. By the end of 2021, there were more than 8.085 million digital RMB pilot scenes, 260 million personal wallets and a transaction amount of 87.57 billion yuan. Shengteng information mainly includes cloud desktop, thin client and payment terminal. The latter two are expected to fully benefit from the high prosperity of the industry.
Investment suggestion: the company's Q1 performance is much higher than expected, and digital economy + East West calculation will bring demand increment. We believe that the inflection point of the company's operation has been preliminarily confirmed. Regardless of the impact of Ruijie network spin off and listing, the net profit attributable to the parent company in 22-24 years is expected to be 864 million / 1255 million / 1773 million respectively, corresponding to 14 times / 9 times / 7 times of PE, and 27 times of the company's valuation center in recent five years. Maintain a "recommended" rating.
Risk tip: the demand for digital communication is less than expected, and the expansion of operators and overseas markets is less than expected.
