1Q22 deducted the high year-on-year growth of non-homed net profit, and the single-quarter performance reached a record high in the same period. According to the company's first quarterly report of 2022, 1Q22's revenue was 2.95 billion yuan, an increase of 53.7% over the same period last year; the net profit of homing was 120 million yuan (in line with the company's forecast of 120 million yuan), an increase of 202.9% over the same period last year. The non-return net profit was 100 million yuan (in line with the company's performance forecast of 101.4 million yuan), an increase of 462.2% over the same period last year. Q1 as the company's traditional off-season, 1Q22 has achieved rapid growth and its performance reached a record high in the same period. We believe that the steady growth of the demand side of the cloud infrastructure industry, the continuous increase of the company's share, as well as the improvement of the company's gross profit margin and good cost-side control have contributed to the improvement of the company's profitability.
We maintain the company's homing net profit forecast for 2022 to 2024 of 764 plus 933 million yuan, respectively. Comparable to the company's 22-year Wind consensus expectation, the average PE is 22.35x, giving the company 22-year 22.35xPE, corresponding to the target price of 29.28 yuan (previous value: 27.51 yuan) and maintaining the "overweight" rating.
1Q22 comprehensive gross profit margin improved year-on-year, cost-side control is good
According to the company's quarterly report of 2022, 1Q22's comprehensive gross profit margin was 34.2%, an increase in 1.0pct compared with the same period last year. We believe that the company's continued breakthrough in the high-end operator market has led to optimization of the shipping structure and relief of the shortage of upstream raw materials. The cost is well controlled. The sales rate / R & D rate / management rate of 1Q22 is 13.1%, 14.6%, 3.8%, respectively, down by 3.6/1.2/0.7pct compared with the same period last year. In terms of fixed assets, the fixed assets of the company at the end of 1Q22 increased by 77.0% to 1.42 billion yuan over the beginning of the year, mainly due to the completion of the third phase of the Hercynian Park project and the transfer to fixed assets.
Cloud infrastructure business share is expected to continue to increase, and desktop cloud is expected to benefit from Xinchuang + industry penetration. According to IDC data, the company's domestic Ethernet switch market share in 2021 was 14.0%, an increase in 2.3pct compared with the same period last year, ranking third in China. In addition, the company ranks third in China's enterprise WLAN market share, with Wi-Fi6 product shipments ranking first. Looking to the future, we believe that with the continuation of the white-box trend of the Datong market and the company's active development of the high-end operator market, the company's market share is expected to continue to increase; in terms of desktop cloud, according to IDC data, in 2021, the company's subsidiary Sheng Teng Information's desktop cloud terminal VDI market share is the first in China, and the thin client market share is the first in Asia-Pacific and the first in China.
We believe that with the steady increase in desktop cloud penetration in China and the continuous development of Xinchuang industry, the company as a leading manufacturer in the domestic desktop cloud industry is expected to continue to benefit.
Maintain the "overweight" rating
As a leading manufacturer in the field of cloud infrastructure in China, the company is expected to continue to benefit from the development of the domestic cloud computing industry and the development process of Xinchuang industry. We maintain the company's homing net profit forecast for 2022 to 2024 of 764 plus 933 million yuan, respectively. Comparable to the company's 22-year Wind consensus expectation, the average PE is 22.35x, giving the company 22.35x PE for 22 years, corresponding to the target price of 29.28yuan (previous value: 27.51yuan), and maintaining the "overweight" rating.
Risk hint: the epidemic situation is repeated; the demand of data center is lower than expected; the demand of Xinchuang is lower than expected.