\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 54 Sangfor Technologies Inc(300454) )
Key investment points
Investment Event: the company released the first quarter report of 2022: the operating revenue in the first quarter of 2022 was 1.144 billion yuan, a year-on-year increase of 4.76%; The net profit attributable to the parent company was -518 million yuan, a year-on-year decrease of 438.9%; Net profit deducted from non parent company was – 580 million yuan, a year-on-year decrease of 281.63%.
Affected by the epidemic in the first quarter, the revenue maintained growth and the profit was under pressure in the short term. It is optimistic that the company’s business will return to the growth track. Affected by covid-19 epidemic, the supply and delivery of some orders in Shenzhen, Dongguan and other places are greatly affected, which affects the recognition of network security business income. As the most important mass production area of the company, Shanghai, Suzhou and other areas hinder the development of market business. In the first quarter of 2022, the company achieved a revenue of 1.144 billion yuan, a year-on-year increase of 4.76%, achieving stable growth. The net profit attributable to the parent company was 518 million yuan, and the company’s performance was under pressure in the short term. In terms of details, the promotion of security business was affected by the epidemic, and the cloud computing business maintained a relatively stable growth rate. From the perspective of products, Internet behavior management, next-generation firewall, MSS business, terminal security, HCI hosting and distributed storage will maintain high-speed growth, and the growth rate of desktop cloud will decline due to the external environment. With the effective control of the epidemic, the company’s performance is expected to continue to maintain high growth with its strong competitive advantage.
Continue to increase investment and enhance the overall competitive advantage of the company. In the first quarter of 2022, the company continued to increase the construction of sales system, investment in research and development of new technologies and products, and the scale of personnel in various fields increased significantly. During the reporting period, the company’s sales, R & D and management expenses were 630 million yuan, 610 million yuan and 112 million yuan respectively, with a year-on-year increase of 22.61%, 26.69% and 31.09% respectively. The growth rate of each expense was higher than that of revenue by 4.76%. The company accelerated the implementation of strategy, continued to increase investment, and continued to improve the overall competitive advantage of the company.
Adhere to the strategic goal of giving priority to xaas, make a continuous breakthrough to cloud, and be optimistic about the development of the company for a long time. The company is determined to make continuous changes, adhere to the strategic goal of xaas priority, make continuous breakthroughs in cloud, gradually build organizational capabilities in line with cloud, online and service-oriented business models, and continue to incubate more cloud and service-oriented delivery of new businesses. The market side will build a new path and organizational guarantee around the goal of big security and big cloud business success, which is conducive to long-term growth. The company adheres to the integration of products and services, and the integration of “online” and “offline” to promote digital transformation. With the continuous improvement of the company’s channel construction, the company’s response capacity will be strengthened. Long term optimistic about the development of the company.
Investment suggestion: we estimate that the company’s revenue in 2022, 2023 and 2024 will be 86.49/112.87/14.854 billion yuan respectively, the net profit attributable to the parent company will be 514/10.51/1.918 billion yuan respectively, the EPS will be 1.24/2.53/4.61 yuan respectively, and the corresponding PE will be 80.9/39.6/21.7 times respectively, giving the company a “buy” rating.
Risk tips: policy changes; The risk that the direction of new business investment deviates from the needs of users and the market promotion does not meet the expectations; The risk of delayed supply of raw materials and blocked market expansion caused by repeated epidemics; The intensification of market competition leads to the company’s profitability less than expected.
