Event: the company disclosed that in the first quarter of 2022, the company realized revenue of 2.95 billion yuan, year-on-year + 53.72%, net profit of 120 million yuan, + 202.88%, and non-net profit of 99 million yuan, + 462.21%.
Profitability has improved steadily and expenses have remained stable. In the first quarter of 2022, the company's gross margin was 34.20% (year-on-year + 0.99PCT, month-on-1.90PCT) and net profit rate was 6.30% (year-on-year + 4.33%, month-on-month + 3.86%). Inventory is 4.63 billion yuan (year-on-year + 63.24%), contract debt is 621 million yuan (year-on-year + 71.19%). In terms of expenses, the company's sales expenses are 388 million yuan (year-on-year + 20.60%), management expenses 113 million yuan (year-on-year + 29.37%), R & D expenses 432 million yuan (year-on-year + 41.85%), and financial expenses 8 million yuan. We believe that the fixed cost of star net Ruijie is relatively high, resulting in the pressure on Q1 net profit for 21 years; with the revenue scale effect, the profit release potential is great, and the rapid growth of inventory and contract liabilities at the end of Q1 shows the company's development potential.
With core competitiveness and leading market share. Adhering to the business philosophy of "integrating innovation and technology and building a smart future", the company has become a leading ICT application provider in China, with the core competitiveness of "software, hardware and service trinity". After years of efforts and development, the company has a certain leading position in some market segments and product segments. According to IDC data quoted in the company's annual report 21, in the field of smart networks, Ruijie ranked third in China's Ethernet switch market share in 2021, and third in China's enterprise WLAN market share, of which Wi-Fi 6 product shipments ranked first.
In the field of smart cloud, the market share of VDI, the desktop cloud terminal of Shengteng Information in 2021, ranks first in China, and the market share of thin clients is the first in Asia-Pacific and the first in China.
Profit forecast. We estimate that the company's income from 2022 to 2024 will be 18.892 billion yuan, 25.15 billion yuan and 31.72 billion yuan respectively (unadjusted), and the net profit of returning home will be 804 million yuan, 1.184 billion yuan and 1.585 billion yuan respectively (unadjusted). EPS is 1.38,2.03,2.72 yuan respectively (unadjusted). Refer to the comparable company, give 2022 PE 25 times (unadjusted), corresponding to the target price of 34.50 yuan (unadjusted), maintain the "better than the market" rating.
Risk hint. Technical risk; the risk of intensified product competition.