\u3000\u3000 Digital China Group Co.Ltd(000034) Digital China Group Co.Ltd(000034) )
Event: the company released the first quarterly report of 2022. The company achieved an operating revenue of 28.599 billion yuan, a year-on-year increase of 19.07%, a net profit attributable to the parent of 187 million yuan, a year-on-year increase of 19.75%, and a net profit not attributable to the parent of 184 million yuan, a year-on-year increase of 20.13%. Performance exceeded market expectations.
Key investment points
Yunhe's own brand business showed strong momentum: in the first quarter of 2022, the performance climbed to the peak again. By business, the revenue of cloud computing and digital transformation business reached 1.118 billion yuan, a year-on-year increase of 38.53%; The revenue of independent brand business reached 431 million yuan, a year-on-year increase of 83.52%. In the first quarter of 2022, the company's R & D expenses increased by 39.57% year-on-year, mainly due to the increase of R & D investment in cloud business and Xinchuang business. Cloud and Xinchuang business are the main driving force for the company's future growth. The company has increased R & D and advanced layout.
Equity incentive gives the goal of high performance growth: on April 11, 2022, the company issued Digital China Group Co.Ltd(000034) 2022 employee stock ownership plan (Draft). The net profit of the employee stock ownership plan in 2023 is not less than RMB 1.2 billion. The performance target for 2022 is about 50% higher than the net profit deducted in 2021, while as of April 28, 2022, the corresponding 2022 valuation is only 9 times PE.
In the new year of industrial innovation and innovation, the company's innovation and innovation business won many large orders in the industry: in 2022, the market scale of industry innovation and innovation is expected to double, and key industries such as finance and telecommunications are making rapid progress. Relying on Huawei Kunpeng, the company is the core manufacturer of Huawei Kunpeng server, and has made a breakthrough in the industry. In terms of operators, Shenzhou Yunke successfully signed the contract for "centralized procurement of artificial intelligence general computing equipment of China Mobile for 21-22 years" in 2021, with a bid winning amount of 149 million yuan. In February 2022, Digital China Group Co.Ltd(000034) successfully won the bid for "centralized procurement of PC servers of China Mobile for 21-22 years", with a bid winning amount of 2.373 billion yuan. In the financial field, Shenzhou Kuntai series products have won the bid of "Kunpeng PC server procurement project of a state-owned joint-stock commercial bank" and "Kunpeng server selection project of the head office of a state-owned joint-stock bank".
Profit forecast and investment rating: Digital China Group Co.Ltd(000034) continuously increase the R & D investment of cloud and Xinchuang business and improve the product performance and service capacity. With the opening of the industry Xinchuang market, we expect the company to obtain a large market share and enter the fast lane of development. Based on this, we raised the forecast of net profit attributable to parent company from 2022 to 2024 to RMB 1.029 (+ 0.09) / 12.35 (+ 0.07) / 1.508 (+ 50) billion, maintaining the "buy" rating
Risk warning: the credit innovation policy is not as expected; Risk of aggravation of the epidemic; The progress of product research and development is less than expected.
