Description of the event
The company released its 2022 annual report. During the reporting period, the company achieved operating income of 30.918 billion yuan, an increase of 17.38% over the previous year; achieved net profit of 406 million yuan, an increase of 40.60% over the previous year; and achieved net profit of the non-return mother of 353 million yuan, an increase of 44.29% over the previous year. In Q4 2022, the company achieved operating income of 9.39 billion yuan, an increase of 20.37% over the previous year: realized net profit of 104 million yuan, an increase of 2108.14% over the previous year; and achieved net profit of 80 million yuan after deducting non-return mother's net profit, an increase of 720.40% over the previous year.
Incident comments
Business is growing steadily, and communication systems and overseas business are improving. In 2022, the company achieved a double increase in operating income and net profit of the mother. The gross margin was 21.97%, an increase of 0.27Pct over the previous year. In terms of revenue by business, communication systems achieved revenue of 20.916 billion yuan, an increase of 22.23% over the previous year, accounting for 67.65% of revenue; optical fiber cables and cables achieved revenue of 6.509 billion yuan, an increase of 11.26% over the previous year, accounting for 21.05% of revenue; and data network products amounted to 3.131 billion yuan, an increase of 3.03% over the previous year, accounting for 10.13% of revenue. The gross margin of communication systems in '22 was 20.46%, an increase of 1.22Pct over the previous year. Overseas business is expanding rapidly, with 2 overseas production bases and 11 global delivery centers around the world, covering more than 100 countries and regions. The D16 Group returned to “%2698 in the early morning, %86 back” and “29+ Merit and Violence Tour Z focused on the main business, seizing development opportunities through scientific and technological innovation. Continued growth in ICT demand at home and abroad has brought the company the opportunities of the times: in the international market, broadband and 5G construction continues to advance, and the growth rate of communication capital expenditure in emerging economies such as Latin America and ASEAN is expected to remain stable; in the domestic market, 5G and gigabit optical networks are covered at an accelerated pace, and demand for infrastructure such as computing power and networks is expected to continue to grow in the future, driving the company's industry sentiment to continue to improve. As a provider of comprehensive information and communication solutions such as optical fiber cables, communication equipment, and integrated services, FIFFIBERCOM is concerned about the value of smart optical networks and has introduced the “LIGHTS” smart optical network architecture with minimalist, intelligent, green, integrated, efficient and safe characteristics. In the digital wave of the industry, Fenghuo is expected to provide one-stop personalized services through the “cloud network integration” service concept to help the digital transformation of the industry.
The popularity of the network visualization industry is expected to rise, and Fenghuang Sky will benefit deeply. Since 20 years, government investment in network visualization has fluctuated due to the impact of the pandemic. The subsidiary Fenghuang Sky is one of the leading network visualization system integrators in China. Net profit reached 479 million yuan in 19. Affected by fluctuations in industry sentiment in 20-22, net profit declined to 66 million yuan, 46 million yuan, and 11 million yuan. In the context of the disappearance of the turmoil of the epidemic and the recovery in industry sentiment, Starry Sky has large profit margins. In the era of high computing power, the importance of AI servers has been enhanced, and the company has a long-term in-depth layout. On December 22, 2016, Firefighter Communications and the US Microcomputer jointly established Fenghuo Ultra Micro to lay out server-related services, and released the FitServer V7 series AI server. In 2022, the company's telecom server market share reached 4.41%, and its position in the industry is quite remarkable. In terms of performance, the subsidiary Fenghuo performed well, achieving revenue of 2.47 billion yuan in '22, an increase of 55.7% over the previous year.
Profit forecasts and investment suggestions: The company's business development has improved smoothly, and the share of overseas revenue continues to increase. The reform of state-owned enterprises continues to deepen, and there is plenty of room for net interest rate recovery. The subsidiary Fenghuang Sky has benefited from the increased popularity of the network visualization industry and the upgrading of AI supervision, and there is plenty of room for profit improvement. In the era of high computing power, the importance of AI servers has increased, and the company's in-depth layout has greatly benefited from its extensive layout. The company's net profit for 23-25 is estimated to be 511 million yuan, 731 million yuan, and 1,018 million yuan, an increase of 26%, 43%, and 39% over the previous year. Corresponding to PE46 times, 32 times, and 23 times, it maintains the “buy” rating and focuses on recommendations.
Risk warning
1. The operator's investment progress in wired communication equipment fell short of expectations;
2. The deterioration of international relations affects the company's supply chain security.