\u3000\u3 Guocheng Mining Co.Ltd(000688) 036 Shenzhen Transsion Holdings Co.Ltd(688036) )
Performance review
On April 26, 2022, the company announced the first quarterly report that the company’s Q1 revenue was 11.1 billion yuan, with a decrease of 2%, the net profit attributable to the parent was 796 million yuan, with a decrease of 0.7%, and the net profit deducted from non attributable to the parent was 711 million yuan, with a decrease of 7.6%.
Business analysis
Weak demand for smartphones in Africa dragged down the company’s revenue. The company’s revenue in Q4 in 2021 and Q1 in 2022 reached 13.6 billion and 11.1 billion yuan, up 6% and – 2% year-on-year. According to IDC, Q4 smartphone shipments in Africa in 2021 were – 7% year-on-year, and the company’s smartphone shipments in Africa were – 7% year-on-year, with a market share of 48%. The weak demand for smartphones in the African market dragged down the company’s revenue. Q4 voice’s smartphone shipments outside Africa are 4% year-on-year. At present, the company’s smartphones account for more than 40% in Pakistan, 20% in Bangladesh and 7% in India.
The profitability is generally stable and the operating capacity has decreased. 1) The company’s Q1 gross profit margin was 21.4%, a decrease of 2pct compared with the same period last year, and the net profit margin was 7.2%, an increase of 1PCT compared with the same period last year. The decrease in gross profit margin is due to the fact that part of the freight is included in the operating cost, and the corresponding sales rate decreases by 1.6pct. 2) The company’s Q1 inventory turnover days increased by 17 days to 83 days, and the turnover days of accounts receivable increased by 2.4 days to 11 days.
Mobile Internet will perform well in 2021. In 2021, the company’s revenue from other businesses (IOT and mobile Internet) reached 2.3 billion yuan, with a simultaneous increase of 112%, and the gross profit margin increased by 4.2pct to 41%. By the end of 2021, the monthly activity of boomlay is about 68 million, that of scooper is about 27 million and that of Phoenix is about 100 million yuan. The company’s global application installation share increased by 240%, ranking third in the global growth list; In the list of regional growth, Africa ranks first.
Investment suggestions:
It is estimated that the company’s parent company performance from 2022 to 2024 will be 4.5 billion yuan, 5.6 billion yuan and 6.8 billion yuan, with a year-on-year increase of 16%, 24% and 22%. The net profit expectation in 2022 and 2023 will be reduced by 7% and 7% compared with the previous period. Maintain the buy rating, and the target price is 113 yuan (20 2022eps).
Risk tips: trade friction risk, exchange rate fluctuation risk and new product promotion are not as expected.
