\u3000\u3 Shengda Resources Co.Ltd(000603) 019 Dawning Information Industry Co.Ltd(603019) )
Matters:
The company issued the annual report of 2021. In 2021, the company realized an operating revenue of 11.2 billion yuan, a year-on-year increase of 10.23%; The net profit was 1.158 billion yuan, a year-on-year increase of 40.78%; It is proposed to pay a dividend of 1.60 yuan (including tax) for every 10 shares.
Ping An View:
Revenue and profit growth continued to improve, and the gross profit margin of high-performance computers continued to improve. In 2021, the company’s operating revenue continued to maintain steady growth, with a growth rate of 10.23%, an increase of 3.57 percentage points over the same period of last year; The gross profit margin reached 23.74%, an increase of 1.62 percentage points over the same period last year; During the period, the expense rate was well controlled, which was 13.94%, a slight increase over the same period of last year (13.61%); The growth rate of net profit attributable to the parent company reached a new high in recent five years, reaching 40.78%, an increase of 2.25 percentage points over the previous year. In 2021, the company expanded smoothly in the enterprise market, especially in the fields of energy, telecommunications, finance and so on. In the telecom market, in addition to server products, storage products are also shortlisted for centralized purchase by operators; New breakthroughs have been made in the energy market. The company has begun to provide basic software and hardware support for wind power design and operation, and is providing domestic computing infrastructure for many manufacturers. In 2021, the company’s gross profit margin continued to rise, mainly due to the improvement of the company’s competitiveness in the field of storage and high-performance computing. In 2021, the gross profit margin of the company’s high-performance computer and storage business reached 16.20% and 26.96% respectively, an increase of 1.39 and 4.69 percentage points respectively over the previous year.
The localization of products is progressing smoothly, and the follow-up promotion in the fields of education, finance and telecommunications will be accelerated. In recent years, the company has continued to strengthen the R & D and promotion of domestic high-performance computer related software and hardware, and positive progress has been made in the fields invested by fund-raising projects. In 2021, the company completed the design of storage IO module for cloud computing and artificial intelligence; Based on the open source BIOS and BMC code architecture, the BIOS startup firmware and BMC remote management firmware supporting domestic processors are developed. In 2021, the company’s domestic servers have been widely used in operators, energy, Internet, education and other industry customers, covering the fields of infrastructure, e-government, enterprise informatization and urban informatization. Haiguang information, a domestic processor chip enterprise in which the company shares, has a net profit of 327 million yuan in 2021, which provides support for the company’s performance growth and lays a solid foundation for the company’s high-performance computing products. During the “14th five year plan” period, we believe that there will be greater growth space for Industry Xinchuang. Relevant pilot policies have been issued in telecommunications, finance, education and other industries. Beijing, Shanghai, Shenzhen and other places have also launched independent and controllable support policies. The company’s server products based on domestic processor platforms are expected to obtain greater market space.
The construction and optimization of the national computing network will bring more market opportunities to the company: in recent years, China has made breakthroughs in 5g, cloud computing, artificial intelligence, intelligent manufacturing and other fields, relevant technologies have been continuously integrated into all fields of economic and social development, and the computing needs of the whole society have been continuously improved. In July 2021, the Ministry of industry and information technology pointed out in its three-year action plan for the development of new data centers (20212023) that with the comprehensive and continuous penetration of digital technology into all economic and social fields, the demand for computing power of the whole society is expected to increase rapidly by more than 20% every year. By the end of 2023, the average rack utilization rate of national data centers will strive to increase to more than 60%, and the total computing power will exceed 200 eflops (eflops, 10 billion floating-point operations per second). In addition to the improvement of overall computing power demand, the company is also benefiting from projects such as “computing from the east to the west”. With its leading position in computing power consumption, performance and architecture, hardware products are expected to be more widely used in data center optimization in the eastern region and data center construction in the central and western regions.
Investment suggestion: the company is a leading IT infrastructure manufacturer in China. Its products cover the whole industrial chain from core to cloud and have strong competitiveness in the government enterprise market. Although it was sanctioned by the United States in 2020, the company returned to the normal track through rapid adjustment and will benefit from the localization of China’s new infrastructure and it infrastructure in the future. Combined with the latest situation of the company’s annual report and the development trend of the industry, we adjusted the company’s profit expectation. It is estimated that the company’s EPS from 2022 to 2024 will be 1.06 yuan (the former value is 0.89 yuan), 1.32 yuan (the former value is 1.11 yuan) and 1.64 yuan (New), corresponding to 26.5x, 21.2x and 17.1x PE on April 14, respectively. We continue to be optimistic about the development of the company and maintain the “recommended” rating of the company.
Risk tips: 1) the progress of policy implementation is less than expected; 2) Intensified market competition; 3) Risk of supply chain disruption.
