\u3000\u3 Shengda Resources Co.Ltd(000603) 220 China Bester Group Telecom Co.Ltd(603220) )
Event overview: on April 14, 2022, the company released its 2021 annual report, realizing an operating revenue of 2.641 billion yuan, a year-on-year increase of 27.82%; The net profit attributable to the parent company was 182 million yuan, a year-on-year increase of 219.08%; The net profit deducted from non parent company was 175 million yuan, with a year-on-year increase of 325.45%.
The performance was basically in line with expectations, and the profitability was significantly improved
Affected by the epidemic and the shortage of chip supply, the construction of 700m network of operators was delayed. The company overcame difficulties and achieved an operating revenue of 2.641 billion yuan, a year-on-year increase of 27.82%. The annual report disclosed that the cumulative bid winning amount and contract signing amount exceeded 6.5 billion yuan, with strong certainty of medium and short-term performance. Thanks to the weakening of the epidemic in China and the optimization of revenue structure, the gross profit margin of the company's main business increased by 4.90pct to 19.81% year-on-year, returning to the 19-year level; At the same time, the company strengthened expense control and increased R & D investment. The sales / management / R & D expense ratio was 2.37% / 4.16% / 4.13% respectively, with a year-on-year decrease of -0.53pct / - 0.70pct / + 0.97pct, and the overall expense ratio decreased by 0.26pct. The company realized a net profit attributable to the parent company of 182 million yuan in 21 years, with a year-on-year increase of 219.08%. On the one hand, due to the improvement of the profitability of traditional business, on the other hand, the profitability of Tongsheng transportation and Jingmen Ruize, which are newly consolidated, is higher. In 21 years, the company's net profit margin increased by 4.12pct to 6.88%.
Traditional businesses are steadily increasing, and smart city + optoelectronic devices are expected to become the second growth curve
5g new infrastructure: in 21 years, the revenue was 2.188 billion yuan, with a year-on-year increase of 19.23%, and the gross profit margin increased by 4.32pct to 18.87%. As the main business, the company won the bid well in the Chinese market. At the end of 21, the total bid winning amount of China Mobile's centralized purchase project exceeded 4.7 billion yuan; Guangdong Telecom was shortlisted for the first time to achieve full coverage of the three major operators in Guangdong. The overseas market made a historic breakthrough and won the bid for the maintenance project as the general contractor in the Philippines for the first time.
Smart city and 5g industry application: in 21 years, the revenue reached 382 million yuan, with a year-on-year increase of 70.38%, and the gross profit margin increased by 4.51pct to 22.25%. In the field of intelligent transportation, the company acquired Wuhan Tongsheng transportation in May 21. The latter has advantages in qualification, industry resources, project delivery and system solutions. In 21 years, the company achieved a revenue of 105 million yuan and a net profit of 22.46 million yuan; The establishment of Hainan Zhongbei and Tianjin Liubai has realized the batch launch and operation of shared motorcycles in Yunnan, Guangdong, Fujian, Hunan and other places. In the field of smart energy, the electric vehicle charging pile project in public areas jointly constructed by the company and the Three Gorges electric energy has been started in Haikou. In the field of information network integration business, strategic cooperation agreements have been signed with Hubei Telecom, Xinghai IOT technology and other enterprises to carry out strategic cooperation in industrial digitization and smart building. At present, several projects have been implemented in Hubei and Yunnan.
Optoelectronic products: in 21 years, the revenue was 52 million yuan, and the gross profit margin increased by 8.97 PCT to 41.76% year-on-year. The company acquired Jingmen ruise in June of 21. The latter focused on the research and development of optical devices, optical fiber sensors and optical fiber lasers. Under the background of the slowdown of 5g forward transmission demand in the first half of 21, Jingmen ruise actively explored the overseas wavelength division market, with a revenue of 39.2 million yuan and a net profit of 3.2 million yuan in 21 years. According to the annual report, at present, Jingmen Ruize has extended the passive component technology to the field of vehicle lidar, and the products have passed the certification of downstream head manufacturers. It is expected to realize mass delivery in the second half of 22 years.
Investment suggestion: we are optimistic about the company's consolidation and expansion, and the revenue structure is expected to be optimized. It is expected that the net profit attributable to the parent company in 22-24 years will be 211 million / 249 million / 319 million respectively, the current share price corresponding to PE is 21 times / 17 times / 14 times, and the valuation center of the company in recent five years is 48 times. Maintain a "recommended" rating.
Risk tip: the gross profit margin declines due to the intensified market competition of operators; Overseas business expansion is less than expected; New business expansion was less than expected.
