\u3000\u3000 Sangfor Technologies Inc(300454) (300454)
Revenue growth is in line with expectations, gross profit margin and net profit margin are still under pressure, waiting for the effect of cloud priority strategy to appear. Sangfor Technologies Inc(300454) in 2021, the operating revenue was 6.707-6.816 billion yuan, with a year-on-year increase of 22.87% - 24.87%, maintaining a rapid growth. Due to the increasing proportion of cloud business revenue, the increase of hardware procurement cost caused by lack of core also had a certain impact on the company's annual profit, the gross profit margin decreased, and the R & D expenses increased by 36.96% - 38.35% year-on-year. The multi-period equity incentive plan promoted the rise of management expenses, resulting in a decrease in the net profit attributable to the parent company from 809 million yuan in the same period of last year to 241-309 million yuan, Performance is under pressure, waiting for the effect of xaas priority strategy to appear gradually.
The business of network security, cloud computing and it infrastructure maintained a high growth rate, and the product competitiveness and channel advantages were verified again. 1) The company disclosed the reasons for the pressure on revenue growth, mainly due to the inaccurate market insight into the needs of industry customers, which led the company to invest more resources in some industry customer groups such as government and public institutions according to inertia. However, affected by multiple factors, this part of the input and output did not match. In addition, there is a gap between the progress of the company's network security products and solutions in recent years and truly meeting the real needs of the industry's customer base. The company's network security business has not built an overall advantage significantly ahead of its peers, resulting in the lack of growth of the company's largest network security business; 2) By the first three quarters of 2021, the company had achieved a revenue of 4.376 billion yuan, a year-on-year increase of 34.88%, an increase of 56.73% over the same period in 2019, maintaining a rapid growth. Due to the continuous increase in the proportion of cloud business revenue, the gross profit margin decreased by 3.77% year-on-year, and the R & D expense rate and sales expense rate increased by 3.51% and 3.73% to 35.42% and 41.94% respectively, putting pressure on the profitability; 3) According to IDC data, in 2020, China's market software definition storage (SDS) increased by 51.7% year-on-year, and the market scale was about 9.47 billion yuan; Hyper converged storage system (HCI) achieved 36.5% growth, with a market size of about 8.5 billion yuan. The market share of Sangfor Technologies Inc(300454) in the field of super integration increased from 1% in 2015 to 13.1% in 2020, ranking behind Huawei (23.9%) and H3C (20.7%); 4) The company has completed the layout of bearing business platform with super integration as the core, and successively released "arm architecture super integration", "cloud computing platform SCP", "cloud original platform scnp" and other heavyweight products. In the future, the company will help the digital transformation of enterprises from the enterprise business level, create a new integration architecture and upgrade the brand to "convinced cloud", Provide customers with an efficient and proactive security system. The company's "convincing cloud" products have independent intellectual property rights, which can smoothly and losslessly migrate VMware virtual machines to new platforms, and can meet users' needs for domestic products. If the international situation tends to be complex, the company's products are expected to accelerate the domestic substitution of VMware; 5) According to IDC data, the hardware revenue of software defined storage (SDS) and hyper converged storage system (HCI) has accounted for nearly 40% in the overall external storage market. With the advantage of flexibly providing storage capacity in hybrid cloud, big data and other scenarios, Sangfor Technologies Inc(300454) is expected to further increase its market share with long-term R & D investment.
The growth rate of network security business is under pressure. We adhere to the strategic goal of xaas (all services) priority and look forward to the effect of cloud layout. 1) The company's network security product line is complete, and the market share of VPN and Internet behavior management are in the leading position in the industry. According to the data of Sangfor Technologies Inc(300454) prospectus, the channel revenue accounts for about 97%. Considering that the inventory and contract liabilities in the first three quarters of 2021 have increased significantly by 419 million yuan and 461 million yuan compared with the same period, the growth rate of the company's revenue is in line with the expectation, The operating cash flow inflow increased by 32.30% year-on-year, matching the revenue, and the annual growth was in line with expectations; 2) Sangfor Technologies Inc(300454) the core business and data of small and medium-sized b customer group have higher acceptance of public cloud, and the cloud businesses such as MSS and SASE are in the early stage. At the industrial level, from the development context of cloud security services at home and abroad and the development stages of companies at IAAs and SaaS levels, we believe that China's cloud security market lags behind overseas for about 5-7 years. At the corporate level, opportunities for Chinese security manufacturers are in the private cloud and hybrid cloud markets. Due to the differences in cloud service providers' genes and ecological construction preferences, China's top customers prefer private cloud and other factors, China's third-party security manufacturers have great development space in private cloud and multi cloud environment. Compared with other network security manufacturers, Sangfor Technologies Inc(300454) has customer base, R & D and channel advantages; 3) Since 2021, the company has made clear the strategic goal of giving priority to xaas (all services), and steadily promoted xaas business including managed cloud, MSS (managed security operation service) and SASE (secure access service edge). The goal is to promote the company's business to gradually realize cloud, online and service
Maintain the "buy" rating. We expect the company's operating revenue to be RMB 8.141/11.25/14.463 billion in 2021 / 22 / 23, and the net profit attributable to the parent company to be RMB 1.208/17.80/2.873 billion, maintaining the "buy" rating.
Risk warning: industry competition intensifies the risk; The policy strength is less than the expected risk; New areas are less than expected risks
