\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 54 Sangfor Technologies Inc(300454) )
Core view
The epidemic had a great impact on the supply chain and customer side, and the revenue growth slowed down in the first quarter. In 2022q1, the company realized revenue of 1.144 billion yuan (+ 4.76%), net profit attributable to parent company of - 518 million yuan (- 438.90%), net profit not attributable to parent company of - 580 million yuan (- 281.63%). The first reason for the slowdown in income growth is the greater impact of the epidemic. In the first quarter, due to the impact of the epidemic in Shenzhen, Dongguan and other places, some raw materials were not delivered in time and production and delivery stagnated, resulting in some orders not delivered in time, affecting revenue recognition. The epidemic situation in Shanghai and Jilin is relatively large. East China accounted for about 35% of the company's revenue in 21 years, making it the largest revenue region of the company. Affected by multiple factors such as customer demand and intensified market competition, the company's new orders are not ideal. The decline of gross profit margin and the expansion of losses are mainly caused by the income structure. The gross profit margin of 22q1 was 58.86%, which decreased significantly year-on-year and month on month; The main reason is that the growth rate of security business is poor. Due to the epidemic, some raw materials in security business are out of stock, and the growth rate of security revenue is significantly lower than that of cloud computing, Internet of things and other businesses, resulting in a further increase in the proportion of businesses with low gross profit margin; At the same time, the cost of hardware procurement has also increased. In terms of expenses, due to the quarterly growth of the company's personnel, the sales, management and R & D expenses maintained a high growth, with the growth rates of 22.61%, 31.09% and 26.69% respectively; Moreover, the absolute amount of 22q1 expenses is also higher than 21q4, which is mainly due to the rise in personnel costs caused by the salary rise at the beginning of the year.
The company's cash flow and balance sheet performance are still healthy, and the proportion of revenue in the first quarter is small. It is expected to pick up quarter by quarter after referring to the epidemic in 2020. In the first quarter, the company's net cash flow was -693 million yuan (compared with -417 million yuan in the same period last year), with a decline less than the profit level. At the balance sheet level, the company is still healthy, with an inventory of 357 million yuan, slightly higher than the previous month; Contract liabilities amounted to RMB 1.053 billion, with a year-on-year increase of 72.6% and a month on month decrease. The company's revenue accounted for about 15% in the first quarter. Referring to 2020, the company's revenue fell in the first quarter, the annual revenue grew by about 19%, and the profit increased slightly. With the gradual recovery of the epidemic in the later stage, the gross profit margin and profitability of the company are expected to achieve considerable improvement after the normal delivery of safety business.
The competitiveness of traditional products remains the same, and cloud transformation is transformed into an industry to explore new formats. The company's traditional products still maintain the market share of the top three in the industry, and its competitiveness and profitability remain unchanged. Information security and cloud computing are still high prosperity tracks with continuous innovation. The channel is the company's stable moat and source of cash flow, and also supports the company to keep up with the international perspective and make a continuous breakthrough to cloud. After fully investing in xaas strategy, the company's overall performance is under pressure, but it also opens a breakthrough in the future. At present, SASE, managed cloud and other businesses have made significant progress.
Risk tip: the epidemic situation repeatedly affects the normal operation rhythm of the company, and the industry competition intensifies
Investment suggestion: lower the profit forecast and maintain the "buy" rating. As the epidemic continued throughout the country in the second quarter, it still had a negative impact on the normal operation of the whole industry. We lowered the profit forecast. From 2022 to 2024, the operating revenue decreased from RMB 88.71/114.92/14.53 billion to RMB 86.87/112.63/14.25 billion, with growth rates of 28% / 30% / 27% respectively. The net profit attributable to the parent company was RMB 4357961086 million, corresponding to 83 / 45 / 33 times of the current PE, maintaining the "buy" rating.
