China Greatwall Technology Group Co.Ltd(000066) industry Xinchuang is expected to become the driving force of the company's growth

\u3000\u300 Shenzhen Zhenye(Group)Co.Ltd(000006) 6 China Greatwall Technology Group Co.Ltd(000066) )

Event: the company released its 2021 annual report. In 2021, it realized an operating revenue of 17.790 billion yuan, a year-on-year increase of 23.15%; The net profit attributable to the parent company was 598 million yuan, a year-on-year decrease of 35.59%; The net profit attributable to the parent company after non deduction was 132 million yuan, a year-on-year decrease of 73.32%. The company released the first quarterly report of 2022, realizing an operating revenue of 2.829 billion yuan, a year-on-year decrease of 9.24%; Net profit attributable to parent company -117 million yuan; Net profit attributable to the parent company after deduction of non-profit -103 million yuan; The range of losses has narrowed.

The whole system is growing rapidly, the PKS system is becoming more and more mature, and the industry Xinchuang is expected to become the driving force of the company's growth. In 2021, the company's network security and information technology business realized a revenue of 11.952 billion yuan, a year-on-year increase of 45.63%. Its feitengrui d2000 has achieved mass production, and Tenglong E2000 has been successfully streamed. The company launched "PKS" 3.0 that supports S2500, d2000, trusted cloud, new defense architecture and other features. The comprehensive market share of the company in the party and government market is nearly 1 / 3; The pilot sales coverage of central enterprises is more than 50%; The comprehensive layout of nine industries is expected to become a new growth driving force of the company with the promotion of industry information and innovation.

Fixed growth focuses on the main business. In 2021, the company successfully completed a non-public offering of 4 billion yuan, of which 1.8 billion yuan was invested in key chips, independent complete machines and domestic complete machine intelligent production line projects; 1.2 billion investment in information and new energy infrastructure construction projects; 300 million investment in military high-tech electronic innovation and application projects; 687 million was used to supplement working capital.

The arm route has been fully proved feasible by apple. After Apple launched the first generation M1 chip based on ARM architecture in 2020, now all Apple product lines have realized the coverage of arm architecture. From Mac studio to MAC series notebooks and desktops, they have realized the coverage of arm architecture, which can meet the actual use needs and have the characteristics of low power consumption.

Investment suggestion: under the industrial trend of large-scale application of arm, the Feiteng development potential held by the company is huge. It is estimated that the company's EPS from 2022 to 2024 will be 0.29/0.37/0.50 yuan respectively, maintaining the buy rating.

Risk tip: the landing of arm industry is not as expected; The development of Xinchuang industry is less than expected; Unable to realize the performance evaluation of equity incentive; Industry competition intensifies

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