\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 54 Sangfor Technologies Inc(300454) )
Highly optimistic about the long-term development of the company and maintain the “buy” rating
Considering the impact of increased investment and incentive expenses, we lowered the company’s net profit attributable to the parent company from 2022 to 2023 to 401 and 747 million yuan (originally predicted to be 1.164 and 1.538 billion yuan), increased the forecast of 2024 to 1.101 billion yuan, EPS to 96, 1.80 and 2.65 yuan / share respectively, and the corresponding PE to 103.1, 55.3 and 37.5 times respectively. Considering the company’s long-term growth, we maintained the “buy” rating.
The steady growth of income and the increase of investment affect the performance of net profit
(1) in 2021, the company achieved a total operating revenue of 6.805 billion yuan, a year-on-year increase of 24.67%. Among them, the revenue of network security business was 3.689 billion yuan, a year-on-year increase of 10.15%, the revenue of cloud computing and it infrastructure business was 2.379 billion yuan, a year-on-year increase of 49.53%, and the revenue of basic network and Internet of things business was 737 million yuan, a year-on-year increase of 42.15%. (2) The net profit attributable to the parent company was about 273 million yuan, a year-on-year decrease of 66.29%, mainly due to the company’s adherence to product and model innovation, resulting in a certain mismatch between input and output. The gross profit margin of the company’s sales was 65.49%, a year-on-year decrease of 4.49 percentage points. First, the proportion of cloud computing and it infrastructure business revenue with low gross profit margin increased; Second, the impact of rising hardware procurement costs caused by tight global chip supply. The company’s R & D expenses increased by 38.34% year-on-year, and the proportion of R & D investment in revenue rose to 30.68%, an increase of 3 percentage points year-on-year; Sales expenses increased by 27.91% year-on-year, higher than the growth rate of revenue. (3) The company’s net cash flow from operating activities was 991 million yuan, a year-on-year decrease of 24.77%, significantly better than the net profit. Due to the increase of advance receipts and deferred income, the company’s contract liabilities were RMB 1.157 billion, a year-on-year increase of 60.37%.
Continue to strengthen product innovation and lead business model innovation
In the field of security, the company continued to promote the xaas priority strategy, upgraded the cloud security access service platform sangforaccess, and launched the cloud delivery SASE micro service architecture, which achieved good recognition on the customer side. At the same time, the next generation firewall AF product has launched an upgraded version. The upgraded product has been integrated into the company’s cloud analysis operation and security hosting platform as a key security component of the company’s border network. In the field of cloud computing and it infrastructure, the company tests the water of hosting cloud services, promotes the integration of HCI products and desktop cloud products, and the integration of HCI products and hosting cloud, so as to help enterprises’ digital transformation.
Risk warning: the company’s business development is not as expected; The risk of intensified competition in the market.
