\u3000\u30 China Baoan Group Co.Ltd(000009) 77 Inspur Electronic Information Industry Co.Ltd(000977) )
Conclusions and suggestions:
The company’s annual revenue / net profit attributable to the parent company in 2021 were 67.05 billion / 2 billion respectively, in line with market expectations. Throughout the year, the competitive structure of the server market was optimized, the proportion of enterprise customers increased, and the profitability of the company improved. In the single quarter of 2021q4, the demand of Internet customers recovered, and the company is expected to improve its performance driven by cloud computing customers in 2022.
Inspur Electronic Information Industry Co.Ltd(000977) released the performance forecast for the first quarter of 2022 on the evening of April 11. It is expected to realize the net profit attributable to the parent company of 314362 million yuan, with a year-on-year increase of 30% – 50% and 241 million yuan in the same period last year. In the context of the impact of the epidemic and the tight supply of raw materials, the company still maintained a high-speed growth trend, and the profit in the first quarter exceeded the market expectation. Raise the company’s performance forecast for the next two years and maintain the “buy” proposal.
Revenue increased rapidly and profitability continued to improve: in 2021, the company achieved an operating revenue of 67.048 billion yuan, a year-on-year increase of 6.36%. Among them, the Chinese business increased by 14.96% year-on-year, and the overseas business decreased by 34.88% year-on-year. The net profit attributable to the parent company was 2.003 billion yuan, a year-on-year increase of 36.57%; The net profit of non parent company deduction was RMB 1.797 billion, with a year-on-year increase of 27.56%, and the profitability was significantly improved. The stabilization of the company’s annual net profit margin mainly depends on the improvement of gross profit margin and the reasonable control of expense rate. The annual gross profit margin in 2021 was 11.4%. Due to the impact of the new accounting standards, freight and other expenses were originally included in the operating cost. It is judged that after restoration, the annual gross profit margin in 2021 is higher than 12%, which is higher than that in 2020. The increase in gross profit margin is due to the increase in the proportion of enterprise customers, the improvement of market competition pattern and the increase in the proportion of AI servers, high-end storage devices and other products. In 2021, the company’s enterprise customers accounted for nearly 40%, of which high-quality customers in finance and communication accounted for nearly 20%, effectively improving the company’s profit level.
In the first quarter of 22, the revenue level was much higher than expected: the 2022q1 forecast was much higher than expected: 1) during the reporting period, benefiting from the pull of downstream market demand, it is expected that the operating revenue in the first quarter of 2022 will increase by more than 45% year-on-year. 2) In terms of profit, the company has also explored its management potential and continuously improved its production and operation efficiency. The company expects the net profit attributable to shareholders of Listed Companies in the first quarter of 2022 to increase by 30% – 50% compared with the same period of last year. The company’s operation exceeded expectations in the first quarter and is expected to grow rapidly in 22 years
Inspur server shipments ranked second in the world: according to IDC statistics, the server industry developed steadily during the reporting period. The sales volume in the Chinese market increased by 12.7% year-on-year to 163.2 billion yuan, and the shipment volume increased by 8.4% year-on-year to 3.91 million units. Among them, Inspur Electronic Information Industry Co.Ltd(000977) server products continued to lead the Chinese market with a market share of 30% + and ranked the top two in the world in 2021; In the first half of 2021, the market share of Inspur Electronic Information Industry Co.Ltd(000977) the AI server products ranked first in the world, with a market share of more than 20%; According to Q4 data of synergy in 2021, Inspur Electronic Information Industry Co.Ltd(000977) server ranked first in the global public cloud infrastructure computing market share for 11 consecutive quarters. The leading position of the company in the industry is stable.
The prosperity of the server industry has been improving for a long time: according to IDC’s prediction, the compound growth rate of China’s overall server market will reach 12.7% in the next five years, and the scale of China’s overall server market is expected to reach US $42.47 billion in 2025, of which the x86 server market will reach a compound growth rate of 13% in the next five years, and the scale of X86 server market is expected to reach US $41.42 billion in 2025. We believe that with the rapid promotion of China’s artificial intelligence, big data, driverless, VR / AR and other emerging technologies, the demand for data processing capacity is increasing, and the prosperity of the server industry is improving for a long time. The company will benefit from the high prosperity of the industry for a long time.
Profit forecast: we expect the net profit of the company in 2022 / 23 to be 2.481/3.35 billion yuan respectively, yoy + 23.87% / + 35.06%, equivalent to EPS of 1.71/2.30 yuan. At present, the corresponding PE of A-share price is 16 / 12 times, giving a “buy” rating.
Risk tips: 1. The price of chips, memory and other cost side increases; 2. The risk of intensified market competition; 3. The development of downstream cloud computing, AI and other industries is less than expected.
