\u3000\u3 Guocheng Mining Co.Ltd(000688) 030 Hillstone Networks Co.Ltd(688030) )
Event:
The company issued the annual report of 2021 and the first quarter report of 2022 after the closing on April 26, 2022.
Comments:
The operating revenue increased by 41.57% year-on-year, and the strategic goods preparation should deal with the risks of raw materials and supply chain
In 2021, the company achieved an operating revenue of 1.027 billion yuan, with a year-on-year increase of 41.57%, and the comprehensive gross profit margin of its main business was 73.93%, with a year-on-year increase of 4.33 PCT. By product: 1) the revenue of border security products was 757 million yuan, a year-on-year increase of 41.35%; 2) The revenue of cloud security products was 52 million yuan, a year-on-year increase of 12.06%; 3) The income of other safety (self owned safety products) was 164 million yuan, a year-on-year increase of 98.02%; 4) Other security (security integration business) revenue was 45 million yuan, a year-on-year decrease of 17.08%. By industry, the revenue of the company’s financial industry reached 255 million yuan, continuing to lead other industries, with a year-on-year increase of 51.11%. In terms of inventory, the company’s ending inventory was 133 million yuan, a year-on-year increase of 37.57%, mainly due to the company’s strategic stock in response to the raw materials and supply chain risks brought by the global epidemic.
The net profit attributable to the parent company increased by 25.39% year-on-year, and the three-dimensional interlock promoted the expansion of key industries
In 2021, the company realized a net profit attributable to the parent company of 755261 million yuan, a year-on-year increase of 25.39%; The net profit deducted from non parent company was 540577 million yuan, with a year-on-year increase of 41.68%; Excluding the share based payment fees generated by the restricted stock incentive plan in 2020, the net profit attributable to the parent increased by 56.18% year-on-year. In terms of R & D, the company comprehensively optimized and upgraded the self-developed hardware platform and corresponding software system, released a series of products and solutions such as the next generation firewall, and purchased the intellectual property rights of “FPGA acceleration technology” with its own funds. The R & D investment was 299 million yuan, a year-on-year increase of 41.01%. In terms of marketing, all departments of the company have completed the structural adjustment based on the three-dimensional interlocking system, and determined the development objectives of key industries represented by finance, operators, Internet, medical treatment and education. The sales cost was 345 million yuan, a year-on-year increase of 55.21%.
22q1 company’s revenue maintained rapid growth, and the early-stage cost investment gradually released the effect
In the first quarter of 2022, the company’s investment in early organizational structure optimization, rich product lines, strengthened sales capacity, R & D technology innovation and marketing development continued to release the effect, realizing an operating revenue of 145 million yuan, a year-on-year increase of 52.97%; The net profit attributable to the parent company was a loss of 72 million yuan, which narrowed year-on-year. The net operating cash flow of the company was – 40 million yuan, with significant year-on-year improvement, mainly due to the collection of accounts receivable at the end of 2021. The main reason for the negative net operating cash flow is that the industry in which the company is located has seasonal characteristics, with more revenue in the second half of the year, but the expenses are relatively average throughout the year.
Profit forecast and investment suggestions
With the implementation of network security law, data security law and other policies, the network information security industry has ushered in a high growth cycle, and the company is expected to fully benefit from the medium and long-term development process. It is predicted that the operating revenue of the company from 2022 to 2024 will be 1.368, 1.805 and 2.336 billion yuan, the net profit attributable to the parent company will be 109, 147 and 196 million yuan, the EPS will be 0.60, 0.82 and 1.09 yuan / share, and the corresponding PE will be 27.67, 20.42 and 15.37 times. At present, the PE TTM of computer (Shenwan) index is 35.3 times. At present, the company’s income volume is small, actively carries out transformation and upgrading, and has large growth space in the future. The company is given 45 times of the target PE in 2022, and the corresponding target price is 27.00 yuan. Maintain the “buy” rating.
Risk tips
Covid-19 pneumonia has been repeated, and the network security investment of government and enterprise customers has been affected; The implementation of policies such as equal protection 2.0 is lower than expected; The R & D and promotion of new products are lower than expected; The industry competition intensifies and the profitability of the company decreases
