Main points of investment
2022H1 has turned its performance from deficit to profit, and its expenses have improved significantly:
The company's 2022H1 revenue increased 25.8% to HK $3.043 billion compared with the same period last year, of which the revenue from the three major operators increased by 71.9%, the income from China Mobile Limited and China Unicom increased by 116.4% and 106.7% respectively, the gross profit margin decreased by 0.4ppts to 27.8%, and the company continued to optimize operating efficiency, reducing the expense rate by 7.2ppts to 28.7%. The net profit turned back to a profit of HK $9038.4 million, compared with a loss of HK $89.36 million in the same period in 2021.
Antenna revenue has increased by 123.5%, and the main business has picked up:
Mainly benefited from the bidding for antenna products related to the three major telecom operators in China since the second half of 2021, the company's orders for base station antenna products recorded a substantial increase of 123.5% over the same period last year. Among them, the antenna revenue in the domestic market increased by 217.9% over the same period last year, and the proportion of revenue increased to 71.0%, while that in the overseas market increased by 29.5%, accounting for 29% of the revenue.
The small base station ushered in the market opportunity, and the company took the lead in winning the bid:
The three major operators are launching large-scale generalized room construction one after another, and the construction is showing a momentum of growth from this year. The total amount of construction in 2022 is twice that of 2021, and it is expected to enter the stage of rapid growth in 2023 and 2024. The indoor scene is the focus of follow-up construction, and the growth potential of small base stations is huge. The global small base station and DAS market will invest 230 billion yuan in 2022, with an annual growth rate of 20% in the next two years, of which investment in small base station equipment accounts for 60% to 70%. Since this year, China's three major operators have launched the collection of 5G extended skin base stations one after another. China Mobile Limited won the bid with a bidding scale of 20,000 sets. China Telecom Corporation and China Unicom are expected to complete the collection by the end of the year.
Our view:
As the construction of 5G in some countries and regions around the world has gradually entered the stage of in-depth development, to broader coverage and to a number of commercial fields, the company is expected to usher in the opportunity of operator 5G macro base station and room division construction. further deepen the integration and development with the vertical industry. The company's business is expected to return to the growth channel with the orderly deployment of the industry's 5G network, and it is recommended to continue to pay attention to it.