\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 54 Sangfor Technologies Inc(300454) )
Event: on April 27, 2022, the company released the first quarterly report of 2022. In 2022q1, the company realized an operating revenue of 1.144 billion yuan, a year-on-year increase of 4.76%; The net profit attributable to the parent company was -518 million yuan, and the loss increased by 438.90% year-on-year; Net operating cash flow outflow was 693 million yuan, an increase of 66.24% year-on-year.
Due to the impact of the epidemic and the shortage of raw materials, both income and gross profit margin are under pressure. In 2022q1, the company achieved revenue of 1.144 billion yuan, a year-on-year increase of 4.76%. Affected by the epidemic in Shenzhen, Dongguan and other places, the company failed to deliver some orders in time. At the same time, the epidemic in Jilin, Shanghai and some other cities affected the company's business development and slowed down the growth of revenue. Due to the decline in the proportion of network security and the shortage of raw materials, the gross profit margin in 2022q1 was 58.86%, down 7.61pct year-on-year.
Adhere to the strategic layout of xaas, and do not change the short-term pain and long-term high prosperity. Adhere to xaas as the core, and it is expected to turn to subscription system in the future. The company's own businesses are mainly infrastructure as a service hosting cloud, security as a service SASE architecture sangforaccess, desktop as a service desktop cloud adesk and operation and maintenance management as a service MSS. It can be clearly seen that the core strategic direction of xaas is "everything is service". In the context of digital transformation, the pattern of enterprises going to the cloud and focusing on private cloud and hybrid cloud will be the main line. The company's focus on service mode is in line with the overall context and is expected to complete the full coverage of front-end and end services.
Investment suggestion: with the tide of digital transformation, the main logic of network security will be sublimated from "cost side + compliance promotion" to "product power + end service". Customers' willingness to take the initiative to build will be greatly improved compared with the tradition Sangfor Technologies Inc(300454) as a scarce manufacturer with perfect channel services in the industry, with its own excellent R & D capabilities, it is expected to quickly open a new pattern of network security in the future. It is estimated that the company's revenue from 2022 to 2024 will be RMB 9003 / 11884 / 14498 million respectively, and the net profit attributable to the parent company will be RMB 414 / 546 / 980 million respectively. The current share price corresponds to the PE of 22 / 23 years, which is 87x / 66x, maintaining the "recommended" rating.
Risk tip: the policy implementation is less than expected, the company's business progress is less than expected, and the market competition is intensified.
