\u3000\u3 China Vanke Co.Ltd(000002) 396 Fujian Star-Net Communication Co.Ltd(002396) )
Event:
The company released the first quarterly report of 2022, realizing an operating revenue of 2.95 billion yuan, a year-on-year increase of 53.72%; The net profit attributable to the parent company was 120 million yuan, a year-on-year increase of 202.88%; Deduct non net profit of 994658 million yuan, with a year-on-year increase of 462.21%
Our comments are as follows:
1. The revenue and profit reached a record high in the first quarter, and the increase in the share of network products continued to drive the growth
Revenue and profit maintained high growth. The company's revenue and profit fluctuated significantly seasonally. The first quarter was the off-season of the annual performance. 22q1 company achieved a revenue of 2.95 billion yuan and a net profit attributable to the parent of 120 million yuan, both of which reached a record high in the first quarter. The main reason is that the company continued to maintain a stable operation, and the sales orders and shipments increased more than the same period last year. We expect the share of switches in Ruijie network data center of the subsidiary to maintain an increasing trend, The continuous breakthrough of customers in the Internet of things and operators industry has promoted the rapid growth of the company's data center switch revenue, and other business lines are expected to grow steadily. We believe that in the future, with the continuous release of cloud computing customer demand and the improvement of the company's market share in operators, network products are expected to maintain a rapid growth trend in the future.
2. Cost control is effective and profitability is expected to continue to improve
On the cost side, 22q1 achieved a gross profit margin of 34.20%, an increase of 0.99pp compared with 21q1 (33.21%) and 0.1pp compared with the whole year of 21 years. On the expense side, 22q1 achieved a net interest rate of 6.30%, a significant increase of 4.33pp compared with the same period last year (1.97%), mainly due to the company's scale effect, the sales expense rate decreased from 16.75% to 13.14%, and the management expense rate decreased from 4.56% to 3.84%. We believe that the company's expense control is effective, and its profitability is expected to continue to improve under the scale effect.
3. Strong growth momentum in the future, and continue to pay attention to the main products of cloud computing / ICT
Looking ahead:
1) the growth of data traffic in China and the development demand of cloud computing drive the continuous and rapid growth of the company's data center switch business; According to IDC's prediction, the global data volume will increase to 175zb by 2025. At the same time, we believe that China's digital economy and East West computing policies are also expected to stimulate the demand for network equipment;
2) the localization trend of Xinchuang drives the procurement demand of the company's network equipment, cloud desktop and other products; According to the data of prospective industry research institute, the localization rate of Xinchuang in 2020 is higher than that in 2019, and the domestic substitution trend continues. We believe that the localization development of Xinchuang is expected to drive the procurement demand of relevant products of the company.
3) China's cloud desktop is expected to accelerate its penetration. IDC predicts that the compound growth rate of China's thin passenger plane and desktop cloud terminal VDI market scale from 2021 to 2025 will be 7.2% and 8.2% respectively. The company's desktop cloud terminal VDI market accounts for the first in China (share 20.3%), and the thin client market accounts for the first in Asia Pacific (share 34.8%), and has achieved ten consecutive titles. As a leading manufacturer in the field, we believe that the company may deeply benefit from the improvement of desktop cloud penetration.
Profit forecast and investment suggestions:
On the whole, the company belongs to cloud computing + Xinchuang target with strong ICT competitiveness at the cloud management end, and will benefit from traffic growth, white box trend and localization development of Xinchuang in the long term. It is estimated that the net profit of the company in 22-24 years will be 700 million yuan, 850 million yuan and 1 billion yuan, corresponding to 18x PE in 22 years respectively. The rating of "overweight" is reiterated.
Risk tip: the progress of cloud desktop penetration is less than expected, the growth of network traffic is less than expected, and fierce industry competition affects profitability
