\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 54 Sangfor Technologies Inc(300454) )
Key investment points
Event: the company released its 2021 annual report, with a 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%; Net profit deducted from non parent company was 131 million yuan, a year-on-year decrease of 80.66%.
The quality of the statements is high, and the cash flow situation gives a positive signal. In a single quarter, the company's 21q4 realized a revenue of 2.429 billion, a year-on-year increase of 9.70%, a net profit attributable to the parent of 405 million, a year-on-year decrease of 45.23%, and a deduction of non attributable net profit of 345 million, a year-on-year decrease of 48.52%. The main reason is that the proportion of safety business income with high gross profit margin is lower, which belongs to the normal adjustment of the company's income structure in the transition period. In 2021, the net operating cash flow was 990 million, with a net cash ratio of 363%. Among them, the cash obtained from the sale of goods and services was 8.2 billion, with a year-on-year increase of 26%, which was at a high level. The net operating cash flow inflow was 8.7 billion, with a year-on-year increase of 25%. From the operating data, the company's channel barriers remained, and the cash flow performance exceeded expectations or was a short-term core catalyst, which fully boosted market confidence.
It has rigid investment in the short term, and its profitability will decline temporarily without changing its long-term positive expectations. In 21 years, the revenue of security business was 3.689 billion, a year-on-year increase of 10%, and the revenue of cloud business was 2.379 billion, a year-on-year increase of 50%. In terms of gross profit margin, the gross profit margin of security business in 2021 was 80.84%, a slight decrease of 0.83pct year-on-year; The gross profit margin of cloud business was 44.14%, with a year-on-year decrease of 5pct, mainly due to the year-on-year increase of 63% in the cost of raw materials. In terms of expense ratio, the company's sales / management / R & D expense ratio in 2021 was 34.0% / 5.8% / 30.7% respectively, yoy + 0.86/0.77/3.03pct respectively, with good overall cost control ability. Considering that the company is still in the critical period of cloud transformation, the R & D investment is expected to continue to increase in the short term. However, as a necessary stage of cloud transformation, the slight increase of expense ratio in the short term has little impact on the net interest rate of the long-term company. In the long run, Profitability is expected to maintain a relatively stable level.
The integration and upgrading of security services and cloud services will accelerate, and it may be an important node in the next two years The iteration of Sangfor Technologies Inc(300454) security business products continues to accelerate. On April 15, 2022, Sangfor Technologies Inc(300454) SASE strategy upgrade conference was successfully held online. SASE 3.0 has three technological innovations: all cloud native architecture, integrated architecture and high-density full security stack, providing complete and preferred SASE solutions in China at present; At the same time, as one of the Sangfor Technologies Inc(300454) flagship products, the next generation firewall will also release a new system sangfor OS in late April 2022; In terms of infrastructure construction, as of March 2022, Sangfor Technologies Inc(300454) has deployed nearly 40 pop point services around the world, covering the most important first and second tier cities in China, with a total bandwidth of more than 150g, serving more than 200000 online users, and processing more than 10 billion network requests per month; According to IDC, Sangfor Technologies Inc(300454) desktop cloud terminals ranked first with a market share of 41.7% in 2021. At the same time, the company launched a zero trust desktop cloud to help users build a secure office space available on demand. The office is unbounded and safe, and truly realize the "5A + s" level office experience Sangfor Technologies Inc(300454) well integrates security capabilities into desktop cloud products, and may become the first product line in the short term.
Profit forecast and Valuation: we believe that 20212023 is the core stage of the company's xaas business layout. The painful period of transformation has gradually passed, and the company has been able to make a relative balance between improving product performance and apparent revenue and profit. It is estimated that in 2022, the company's products will mature iteratively, its profitability will stabilize and its profit model will run through. It is estimated that the company's revenue from 2022 to 2024 will be 9.059/11.997/16.398 billion yuan respectively, and the net profit attributable to the parent company will be 657/11.21/2.054 billion yuan respectively. Give the company a 9-11x target P / s for 2022, with a target price of 196.16-239.75 yuan, maintaining the "buy" rating.
Risk tip: business expansion is less than expected, the effect of channel construction is less than expected, and the competition in the network security industry is intensified
