\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 728 China Telecom Corporation Limited(601728) )
In the first quarter of 2022, the revenue and profit achieved double-digit growth. The company achieved operating revenue of 118.6 billion yuan (+ 11.5%) in the first quarter of 22 years; The net profit attributable to the parent company is 7.22 billion yuan (+ 12.1%), and the net profit not attributable to the parent company is 8 billion yuan (+ 10.4%). The performance met expectations and maintained a steady growth momentum.
Revenue side: (1) the number of 5g users continues to grow, promoting the good development of mobile business. Mobile business revenue in the first quarter was 49.01 billion yuan (+ 5%). The number of mobile users increased by 7.11 million to 379 million, of which the penetration rate of 5g users reached 55.5%, with a month on month increase of 5.1%. The ARPU value of mobile business is 45.1 yuan, which is the same as that of mobile business in the whole year of 21 years. (2) The strong growth momentum of smart home business has helped the steady growth of fixed network business. The revenue from fixed network and smart home services reached 29.65 billion yuan (+ 5%). In the first quarter, the number of wired broadband users increased by 3.4 million to 173 million. Thanks to the company’s comprehensive promotion of digital solutions such as whole house intelligence, smart community and digital village, the income of smart families increased by 22.5% year-on-year, and the comprehensive ARPU value of broadband reached 46.7 yuan, a slight increase compared with the ARPU value of broadband in the whole year of 21 years. (3) Industrial digitalization business accelerated. In the first quarter, the revenue of industrial digital business reached 29.41 billion yuan (+ 23%). The company gives full play to the advantages of Tianyi cloud, enriches the 5g private network business model, and provides customers with comprehensive intelligent scene solutions through the new digital information infrastructure integrated with cloud network, realizing the accelerated growth of industrial digital business.
Cost side: continue to increase R & D investment, and the cost has increased to a certain extent. The operating cost of the company in the first quarter was 81.78 billion yuan (+ 12%). The main reason for the significant increase in cost and expense is that while continuously optimizing network quality and improving user perception, the company also actively increases investment in the development and R & D of 5g, industrial digitization and other businesses. During the reporting period, the company’s R & D expenditure was 1.12 billion yuan (+ 56.8%), which was invested in the introduction of high-tech talents, cloud network integration, 5g core technology research and development, etc; The sales cost was 14.24 billion yuan (+ 12.2%), and the necessary marketing resources were continuously invested in the opportunity period of 5g and industrial digital development.
Give full play to the advantages of cloud network integration and continue to develop industrial digital business. The company actively grasps the development trend of digital economy and continues to increase investment in industrial digitization. It is expected to invest 27.9 billion yuan (+ 62%) in industrial digitization in the whole year of 22 years. The company will continue to invest in 5g network construction in 22 years, and is expected to deploy 900MHz band network to make up for the lack of 5g low-frequency network coverage. At the same time, it is planned to add 45000 racks and 160000 cloud servers to enable industrial upgrading by building a cloud base in the computing age.
Risk warning: 5g development is not as expected; The development of industrial digital business is less than expected; The impact of the epidemic has intensified.
Investment suggestion: we believe that under the background of “digital economy”, the company has the advantages of cloud resources. By continuously increasing investment in industrial digitization, it is expected to promote the rapid development of industrial digitization business. At the same time, benefiting from the steady growth of 5g users and the development of smart home services, mobile services and broadband services will move forward steadily. Maintain the profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 29.2/336/37 billion yuan respectively, and the corresponding PE will be 12 / 11 / 10x respectively, maintaining the “buy” rating
