\u3000\u3 Shengda Resources Co.Ltd(000603) 019 Dawning Information Industry Co.Ltd(603019) )
Event: according to the company's annual report, the revenue increased by 10.2% to 11.2 billion yuan, the net profit attributable to the parent increased by 40.8% to 1.16 billion yuan, the net profit deducted increased by 47% to 770 million yuan, and the cash flow changed from positive to negative to -495 million yuan. According to this calculation, the company's Q4 revenue, net profit attributable to parent company and net profit deducted from non parent company increased by 12%, 38.6% and 42.9% respectively. Compared with the performance express, the growth rate of the company's revenue, net profit and net profit deduction increased to a certain extent.
In 2021, both the overall revenue growth and the growth of each business increased compared with the same period of last year. We believe that this shows that although the company is still affected by US sanctions, its operations have improved. The company's high-end computer business increased by 10.3% to 8.88 billion yuan, while storage and software development, system integration and technical services increased by 6.2% and 13.0% respectively. The gross profit margin of all businesses of the company increased, and the overall gross profit margin increased by 1.6pct to 23.7%. We believe that by continuously optimizing the business structure, the company continues to increase the proportion of high-end products and core components business, and exports its own capabilities to partners through technical services to ensure the stable growth of revenue.
In terms of expense rate, the growth of R & D expenses and sales expenses exceeded the growth of revenue, increasing by 24.9% and 30.9% respectively; Management expenses were relatively stable, with an increase of 8.3% to 240 million yuan; The financial expense was - 140 million, and the overall expense rate was 13.9%, an increase of 0.3pct over the same period last year. The company's operating cash was negative for the first time since 2017, mainly due to the increase in stock, and the inventory increased by 3.22 billion to 6 billion. We believe that the overall chip supply was tight last year, and the company's increase in stock is a normal phenomenon, which can better ensure the delivery of subsequent products.
R & D investment will enhance the company's comprehensive strength, and the upstream ecological construction is expected to improve the profit space. In 2021, the R & D investment of the company increased by 62.8% to 1.53 billion yuan, accounting for 13.7% of the main business income. It mainly invests in the research and development of complete machines and components based on domestic chips. The company has completed the design of storage IO module for cloud computing and artificial intelligence, and developed BIOS and BMC firmware supporting domestic processors based on open source BIOS and BMC code architecture. We believe that the company's building a computing ecosystem around domestic chips is an important strategic direction in the future. The progress in io, BMC and BIOS will become an important performance growth point of the company in the future and contribute to the improvement of the company's gross profit margin and net profit margin.
Profit forecast and investment suggestions
As the company's revenue growth has gradually returned to growth, and the profit margin has improved with the optimization of business, and it has been reflected that the profit growth is higher than the revenue growth, we raised the gross profit margin forecast and profit forecast of the company's businesses, and predicted that the company's EPS in 22-24 years is 1.03/1.43/1.84 yuan (the original forecast of 22-23 EPS is 0.96/1.23 yuan). According to the valuation level of comparable companies, the company was given 35 times PE for 22 years, corresponding to the target price of 36.05 yuan, maintaining the buy rating.
Risk tips
The policy is not as expected; Industry competition intensifies; R & D is not as expected; Haiguang's performance is lower than expected; Trade restrictions;
