\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 54 Sangfor Technologies Inc(300454) )
Event: the company released its 2021 annual report on the evening of April 19, with an annual revenue of 6.805 billion yuan, a year-on-year increase of 24.67%. The net profit attributable to the parent company was 273 million yuan, a year-on-year decrease of 66.29%, and the net profit deducted from non attributable to the parent company was 131 million yuan, a year-on-year decrease of 80.66%, and the basic earnings per share was 0.67 yuan. The revenue and profit unanimously predicted by the market were 7.903/1.092 billion yuan respectively, and the performance was lower than the market expectation.
Comments:
The proportion of cloud computing business increased, and the growth of network security business slowed down
The revenue from cloud computing and it infrastructure business was about 2.379 billion yuan, with a rapid growth rate of 49.53% year-on-year, accounting for 34.97%. The revenue of network security business was about 3.689 billion yuan, with a year-on-year increase of 10.15% and a decrease in the proportion to 54.20%; The business income of basic network and Internet of things was RMB 737 million, with a year-on-year increase of 42.15%, accounting for 10.83%.
The R & D investment increased and the profit decreased significantly
In 2021, the company continued to increase R & D investment, with R & D expenses reaching 2.088 billion yuan, a year-on-year increase of 38.34%. The increase in the proportion of low margin products led to the overall gross profit margin of the company falling to 65.49%, down 4.49pct year-on-year. The annual amortization of equity incentive exceeded 400 million yuan, the sales expenses increased by 27.91% year-on-year, and the final annual net sales interest rate was 4.01%, a year-on-year decrease of 10.82pct.
Transformation brings short-term pain, and the prospect is worth looking forward to
In 2021, the company defined the strategic goal of xaas priority, promoted businesses including managed cloud, MSS and SASE, and gradually realized cloud, online and service-oriented business of the company. On the market side, due to the low customer acceptance of xaas business and the increasing difficulty of market promotion, the growth rate of sales expenses is higher than that of revenue. The market share of the company’s core products is leading, and the transformation of subscription services is expected to increase customer stickiness. Cloud services are the development trend of the industry in the future, and the prospect is worth looking forward to.
Profit forecast and valuation
Considering the intensified competition in the industry, the strategic transformation of the company and the changes in the valuation of the sector, we adjusted the revenue in 202223 to be 8.310/10.691 billion yuan (the original value is 10.257 billion yuan and 13.348 billion yuan), and the net profit attributable to the parent company to be 540625 million yuan respectively (the original value is 1.258 billion yuan and 1.567 billion yuan). At the same time, we increased the profit forecast for 24 years, the revenue is 13.402 billion yuan, the net profit is 830 million yuan, EPS is 1.30/1.50/2.00 yuan / share, and the corresponding PE is 77X / 66x / 50x respectively. Maintain the “overweight” rating.
Risk tips
Repeated outbreaks; The expenditure of downstream customers does not meet expectations; Network security and cloud computing market competition intensifies; New business market expansion did not meet expectations.
