\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 3 Zte Corporation(000063) )
Event description:
The company released the performance report for the first quarter of 2022: in Q1 2022, the company achieved an operating revenue of 27.93 billion yuan, a year-on-year increase of 6.4%; The net profit attributable to the parent company was 2.22 billion yuan, a year-on-year increase of 1.6%; The non net profit attributable to the parent company was 1.95 billion yuan, a year-on-year increase of 117.1%; The basic earnings per share is 0.47 yuan.
Event comments:
The company’s performance exceeded our previous expectations, and the non net profit attributable to the parent company increased significantly. We believe that the company continues to improve its operation quality and efficiency, continuously enhance the profitability of its main business and continuously improve its gross profit margin.
The company made steady progress in revenue in the first quarter, continued to consolidate its core technical competitiveness and continuously increased R & D investment.
Under the dual challenges of the complex external environment and covid-19 epidemic, the company operated steadily and achieved year-on-year growth in the two major markets in China and the three major businesses of operators, government enterprises and consumers. The consumer business showed a continuous and large-scale trend, and the revenue of consumers in overseas markets increased by nearly 30% year-on-year.
In 2022, Q1’s R & D investment was 4.698 billion yuan, with a year-on-year increase of 12.07%, accounting for 16.82% of operating revenue, with a year-on-year increase of 0.84pct. We believe that the company continues to increase the depth and breadth of R & D, continuously improve product competitiveness, and strive to build a moat for the company’s long-term development.
Good cost control and continuous improvement of gross profit margin. The excellent management ability of the company is fully reflected.
The company’s Q1 gross profit margin in 2022 was 37.78%, up 2.34 PCT year-on-year and 6.84 PCT month on month compared with the fourth quarter of last year, which was mainly due to the increase in the gross profit margin of operators.
The three fee rate of the company further decreased. The sales expense rate, management expense rate and financial expense rate were 7.7%, 4.57% and 0.19% respectively, with a decrease of 0.55pct, 0.2pct and 1.25pct respectively.
Diversified business layout is expected to open the second growth curve and achieve leapfrog development towards the world’s top 500.
The operator’s business “fixed capital”. Chinese market companies are deeply involved in 5g large-scale construction and strive to achieve more than 40% market share of main products; Overseas markets operate steadily around the “big country, big T and big network”.
Government and enterprise businesses are committed to becoming “road builders of digital economy” and enabling thousands of industries with ICT technology. We will strengthen the expansion of key industries, strengthen channel competitiveness, focus on advantageous products, and expect to achieve rapid growth.
The company firmly develops consumer business and is committed to creating a smart ecology of the whole scene. Continue to release competitive products, strengthen brand investment and channel construction, and make it an important driving force for revenue growth.
The company integrated and established the digital energy products business department, strengthened the operation of power supply, IDC and other products, and actively expanded the new energy business. At the same time, an automotive electronic product line has been established to help the intelligent development of the automotive field.
Investment suggestions:
We expect the operating revenue of the company from 2022 to 2024 to be 131.2 billion yuan, 150.1 billion yuan and 173 billion yuan respectively, and the net profit attributable to the parent company to be 8.14 billion yuan, 9.61 billion yuan and 10.93 billion yuan, corresponding to PE of 12.67x, 10.73x and 9.44x. Maintain the “buy” rating.
Risk tips:
Operator investment slows down; The epidemic caused the growth of overseas business to be lower than expected.
