\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Key elements of the report:
The company released the 2022q1 performance report on the evening of April 25. The company achieved an operating revenue of 29.730 billion yuan (YoY + 6.43%), a net profit of 2.217 billion yuan (YoY + 1.60%) attributable to shareholders of listed companies, a net profit of 1.952 billion yuan (YoY + 117.13%) attributable to shareholders of listed companies after deducting non recurring profits and losses, and an EPS of 0.05% in 2022q1 47 yuan, the performance is in line with expectations.
Key investment points:
The gross profit margin returned to a high point, and the deduction of non net profit rose sharply. In the first quarter of 2022, 1340005g base stations were newly built in China, driving the steady improvement of Q1 performance of the company. The gross profit margin of the company in Q1 was 37.78% (QoQ + 6.84pct, yoy + 2.34%), which has been restored to the level of 2021q3 gross profit margin. We believe that the increase in gross profit margin is mainly due to the high proportion of shipments of related products from operators with high gross profit in Q1. The growth rate of non net profit deducted from Q1 of the company is quite different from that of net profit attributable to the parent company. The main reason is that the company transferred up to 90% equity of communication with RMB 1.035 billion in 2021q1, resulting in higher investment income in 2021. In addition, the company's exchange losses due to exchange rate fluctuations led to a decrease of 326 million yuan in the company's financial expenses compared with the same period of the previous year, and the profit and loss from changes in fair value caused by the revaluation of the fair value of derivatives decreased by 284 million yuan compared with the same period of the previous year.
Multi track force, the second growth curve is clearly outlined. In the short term, the company's servers and storage are businesses that are expected to achieve rapid growth and contribute to scale increment. In February 2022, the company ranked the top two among the multiple standard packages of centralized server procurement from China Telecom Corporation Limited(601728) 2022 to 2023 and the first among the "standard package 1" of centralized procurement of China United Network Communications Limited(600050) ECs. Relevant products have a good customer base and brand influence in the operator market, Internet and financial industry. At the same time, the company has obvious advantages in overseas home information terminal products, and the differentiated competition mode of mobile phones has also brought loyal customer groups to the company. In the medium and long term, the company has accelerated its expansion in key areas such as 5g industry application, automotive electronics and digital energy, and continuously optimized its organizational form to better support and meet the needs of operators, government and enterprise customers for business transformation and upgrading, as well as the personalized and diversified needs of individual consumers, so as to accelerate business expansion and consolidate the long-term second growth curve.
Profit forecast and investment suggestions: it is estimated that the company's revenue from 2022 to 2024 will be 126.4/139.2/1540 billion yuan respectively, the net profit attributable to the parent company will be 85.98/102.35/11.926 billion yuan respectively, the EPS will be 1.82/2.16/2.52 yuan respectively, and the closing price of PE on April 25 will be 12x / 10x / 9x, maintaining the "buy" rating.
Risk factors: trade friction intensifies, China's 5g construction fails to meet expectations, and overseas expansion is less than expected
