\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 728 China Telecom Corporation Limited(601728) )
Event overview
The company released its first quarterly report. In 2022q1, the company achieved an operating 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, an increase of 12.1% over the same period last year. The net profit deducted from non parent company was 7.985 billion yuan, an increase of 10.4% over the same period last year. Analysis and judgment:
Since the “cloud to digital transformation”, the revenue and profit have maintained high growth and continued the good trend of high-quality development
After the overall revenue and profit growth rate increased to more than 10% in 2021, the revenue and profit continued to grow in double digits in the first quarter of 2022. In Q1 2022, the company’s operating revenue was 118576 billion yuan, a year-on-year increase of 11.5%; The overall gross profit margin was 31.03%, basically flat compared with the same period last year, with a slight decrease of 0.37pct; The net profit attributable to the parent company was 7.223 billion yuan, an increase of 12.1% over the same period last year. The net profit deducted from non parent company was 7.985 billion yuan, an increase of 10.4% over the same period last year. In terms of business, the revenue of mobile communication services was 49.014 billion yuan, a year-on-year increase of 5%, the revenue of fixed network and smart home services was 29.645 billion yuan, a year-on-year increase of 4.9%, and the revenue of industrial digitization was 29.414 billion yuan, a year-on-year increase of 23.2%, which contributed to the main growth of the company.
The overall cost side is stable, the R & D field continues to invest, and the profitability is relatively stable
Continue to increase R & D investment, and the overall cost rate increased slightly during the period. In Q1 2022, the company’s sales / management / R & D / financial expense ratio was 12.01% / 8.26% and 0.94% / 0.16% respectively, with a year-on-year increase of + 0.07 / – 0.33 / + 0.27 / – 0.35pct. The overall expenses remained basically stable, and the management and financial expense ratio decreased slightly, mainly due to the increase of expenses such as stock appreciation rights and the effective pressure drop of the scale of the company’s interest paying bonds.
The scale of C-end mobile communication service customers is stable, and the value contribution of fixed network and smart home services continues to increase
In the first quarter of 2022, the mobile communication service revenue was 49.014 billion yuan, with a year-on-year increase of 5.0%. The net increase of mobile users was 7.11 million, reaching about 380 million, the net increase of 5g package users was 22.95 million, reaching about 211 million, the penetration rate was 55.5%, and the ARPU of mobile users was 45.1 yuan. The service income of fixed network and smart home reached 29.645 billion yuan, a year-on-year increase of 4.9%, the number of wired broadband users reached 173 million, the income of smart home increased by 22.5% year-on-year, driving the comprehensive ARPU of broadband to 46.7 yuan, and the value contribution of smart home continued to increase.
Strengthen the “cloud to digital transformation” strategy, continue to push it in depth, and accelerate the industrial application and promotion
In terms of industrial digitization, China Telecom Corporation Limited(601728) vigorously promote the integrated development of digital economy and real economy, and give full play to the market competitiveness of Tianyi cloud. Promote customers to speed up the “cloud with digital intelligence”, enrich and innovate 5g customized network business model, create comprehensive intelligent scenario solutions, and actively enable the transformation and upgrading of traditional industries; Give play to the leading advantages of forward-looking resource layout, accelerate the construction of computing network and build intelligent and comprehensive digital information infrastructure. In the first quarter of 2022, the company’s industrial digital business accelerated growth, with revenue reaching 29.414 billion yuan, a year-on-year increase of 23.2%, becoming the second curve driving the company’s growth, and the growth rate significantly exceeded the other two businesses.
Investment advice
With the large-scale production of 5g, the network operation and support expenditure will increase rapidly. The expansion of ICT and other information service businesses will also trigger a strong demand for transformation and upgrading resources. It is expected that China Telecom Corporation Limited(601728) net profit will grow well, maintain a good profit level and continue to create value for investors. Maintain the profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 4863.8/537.26/592.43 billion yuan respectively, and the expected earnings per share will be 0.33/0.37/0.42 yuan respectively, corresponding to the closing price of 3.96 yuan / share on April 22, 2022, PE will be 12.1/10.6/9.4 times and Pb will be 0.82/0.80/0.77 times respectively, which is still lower than the global industry average and maintain the “overweight” rating.
Risk tips
5g network construction and promotion are not as expected; The development of industrial digital business is less than expected; The development of smart home business is less than expected; Systemic risk. The Securities Research Report shall be sent to China Stock Market News Information Co., Ltd. The copyright belongs to Huaxi Securities Co.Ltd(002926) all rights reserved, please do not forward. p1
