\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 728 China Telecom Corporation Limited(601728) )
Events
The company released the first quarterly report of 22 years, with 22q1 revenue of 118576 billion yuan, a year-on-year increase of 11.5%; The net profit attributable to the parent company was 7.223 billion yuan, a year-on-year increase of 12.1%; ROE1. 67%, basically flat year-on-year.
Our comments are as follows:
The C-end / b-end business continues to grow, driving the revenue to maintain double-digit growth.
After the overall revenue growth rate of the company increased to more than 10% in 2021, the revenue in the first quarter of 2022 continued to grow in double digits. In the first quarter of 2012, the revenue was 118576 billion yuan, a year-on-year increase of 11.5%, of which the service revenue (excluding hardware sales) was 110024 billion yuan, a year-on-year increase of 9.9%. Both C-end business (mobile and fixed network) and b-end business (Industrial digitization) achieved good growth. Specifically:
1) mobile communication service revenue was 49.014 billion yuan, with a year-on-year increase of 5.0%, 380 million mobile users, 5g package penetration rate of 55.5%, ARPU value of 45.1 yuan, slightly higher than that of 45.0 yuan in 21 years, and the trend of both volume and price continued;
2) the fixed network service revenue was 29.645 billion yuan, an increase of 4.9% year-on-year, 173 million broadband users, and the income of smart families increased by 22.5% year-on-year, driving the comprehensive ARPU of broadband to 46.7 yuan, which continued to increase compared with 45.9 yuan in 21 years;
3) industrial digitalization gave full play to the market competitiveness of Tianyi cloud, enriched the business model of 5g customized network, actively enabled the transformation and upgrading of traditional industries, and achieved an income of 29.414 billion yuan, a year-on-year increase of 23.2%, continuously driving the overall income growth.
The gross profit margin of moderate investment is relatively stable, the scale effect is significant, and the expense rate is expected to continue to be diluted.
In the first quarter of 2022, the company’s overall gross profit margin was 31.03%, a slight decrease of 0.37 percentage points compared with the same period. The main reason is that the company still moderately increased investment in capacity-building in the first quarter and the growth of mobile terminal commodity sales. From the perspective of expense rate, the sales expense rate is 12.01%, which is basically the same year on year. At present, it is in the period of 5g development opportunity, and the necessary marketing resources are continuously invested; The rate of administrative expenses was 8.26%, a year-on-year decrease of 0.33 percentage points. Under the continuous growth of income, the rate of expenses was gradually diluted; The R & D expense rate was 0.94%, with a year-on-year increase of 0.27 percentage points, mainly due to strengthening the R & D of core technologies such as cloud network integration and 5g to maintain long-term competitiveness; The financial expense rate was 0.16%, a year-on-year decrease of 0.35 percentage points. Overall, the company’s expense rate decreased by 0.34 percentage points year-on-year. We expect that due to the significant scale effect of operators, the overall profitability of the company is expected to continue to optimize after the revenue growth accelerates to double digits.
Investment advice and profit forecast
The C-end business fundamentals continued to improve, ARPU value rebounded steadily, and 5g penetration continued to grow. The growth of b-end business has accelerated, and industrial digitization, 5g applications, cloud and IDC have opened up growth space. It is estimated that the net profit attributable to the parent company in 22-24 years will be 30.4 billion yuan, 35.4 billion yuan and 41.3 billion yuan respectively, corresponding to 12 times of P / E in 22 years and 10 times of P / E in 23 years, 0.83 times of P / E in A-Shares and 0.52 times of P / E in H shares. The dividend payout rate is expected to gradually increase. The company will fully share the growth results with shareholders and reiterate the rating of “increased holdings”.
Risk warning: the price pressure of industry competition exceeds expectations, the progress of new business does not meet expectations, and the policy risk
