1. Event: on August 16, 2022, the company released its semi-annual report of 2022. 2022H1 achieved an operating income of 240.219 billion yuan, an increase of 10.42% over the same period last year, and a net profit of 18.291 billion yuan, an increase of 3.09% over the same period last year. The company's 2022Q2 single-quarter revenue is 121.643 billion yuan (yoy+9.36%,qoq+2.59%); Q2 return net profit is 11.068 billion yuan (yoy-2.07%,qoq+53.23%).
2. Revenue side: all-round promotion, the development of two-wheel drive company
2022H1's service revenue was 221.4 billion yuan, an increase of 8.8% over the same period last year, and continued to maintain a higher growth rate than the industry average. at the same time, a pattern of two-wheel drive and mutual promotion of basic business and industrial digital business has been formed.
Among them, 1) in terms of mobile communication services, H1 company's mobile communication service revenue increased by 6.0% year on year to 99 billion yuan in 2022, accounting for 44.72% of service revenue. The net number of mobile users increased by 11.79 million to 384 million, and the number of 5G package users reached 232 million, with a penetration rate of 60.3%, maintaining a leading level in the industry. At the same time, the ARPU of mobile users continued to grow to 46.0yuan.
2) in terms of fixed network and smart family services, H1 company's fixed network and smart family service revenue increased by 4.4% to 59.9 billion yuan in 2022 compared with the same period last year, accounting for 27.06% of service income. Of this total, broadband access revenue was 40.8 billion yuan, an increase of 7.1% over the same period last year; the number of cable broadband users also increased to 175 million, of which 20.68 million were gigabit broadband users, and the penetration rate further increased to 11.8%.
The contribution to the value of smart home business continued to increase, and the comprehensive broadband APRU increased to 47.2 yuan.
3) in terms of industrial figures, H1 company's industrial digital income reached 58.9 billion yuan in 2022, a year-on-year increase of 19.0%, accounting for 26.60% of service revenue.
3. Cost side: vigorously increase R & D, keep profitability stable in 2022 H1, the company strengthens expense control, and the rate of sales / management / R & D expenses is 11.62%, 7.12%, 1.35%, year-on-year change-1.21 pm, 5.28max, 67.34 percentage points. Among them, R & D expenditure increased by 84.8% to 3.25 billion yuan over the same period last year, mainly due to the company's continuous efforts to strengthen scientific and technological innovation and speed up the construction of scientific and technological enterprises.
4. the medium-term dividend plan will be settled and actively give back to the majority of shareholders.
The company pays a cash dividend of 0.12 yuan per share (including tax) in mid-2022, which is the first interim dividend paid by the company, with an interim dividend rate of 60%. At the same time, the company said that within three years of A-share issuance and listing, the dividend payout rate will gradually rise to more than 70%, sharing the fruits of development with investors.
5. With the vigorous development of industrial digitization, efforts will be made to cultivate the momentum of future growth. H1 industry digital income growth will accelerate and revenue contribution will increase in 2022. It is expected that its share of service business income will further increase to 30% in 2024. It is expected to be the second largest engine of the company's service revenue growth.
We believe that the digital momentum of the company's industry is remarkable. 2022H1's business contributes nearly 50% of the incremental revenue, and each subdivision of the track performs well and forms optimistic expectations, which will create a strong growth momentum for the company in the future and land on the second growth curve.
6. Investment suggestions
Through continuous R & D and construction, the company continues to enrich the product line and optimize the product structure, while benefiting from good policy and expected market foundation, is expected to bring considerable performance increment for the company. Slightly adjust the company's profit forecast for 2023-2024, the estimated revenue for 2022-2024 is 4863.8max 537.26 billion RMB, and the estimated net profit is adjusted from 298.9 pound 341.9 billion RMB 38.57 billion to 298.9 pm 38.7 billion RMB, respectively, and the estimated earnings per share are 0.330.37 pm 0.42 RMB respectively. Corresponding to the closing price of 3.75 yuan per share on August 16, 2022, PE is 11.5, 10.0 and 8.9 times, respectively, maintaining the "overweight" rating.
7. Risk hint
Customer concentrated risk; technology research and development is less than expected risk; industrial digitization progress is not as expected risk; epidemic aggravating risk; systemic risk.