\u3000\u3000 Jiangsu Zhongtian Technology Co.Ltd(600522) (600522)
Event: on January 26, 2022, the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will be 100-150 million yuan, a year-on-year decrease of 93.4-95.6%; It is estimated that the net profit attributable to the parent company after deducting non-profit is 20-100 million yuan, a year-on-year decrease of 95.2% - 99.0%.
Comments:
According to the announcement of the company, the median net profit attributable to the parent company in 2021 is expected to be 125 million yuan, a year-on-year decrease of 94.5%; It is estimated that the median net profit attributable to the parent company after deducting non-profit is 60 million yuan, a year-on-year decrease of 97.1%.
This performance reduction of the company is mainly due to the abnormal execution of some contracts related to high-end communication business, and the provision of large impairment losses for accounts receivable, other accounts receivable and inventory related to high-end communication business, which has an impact on the company's net profit attributable to shareholders of Listed Companies in 2021 of -3023214500 yuan, After accrual, the book value of high-end communication business related assets is 15600 yuan. We believe that the risk of high-end communication business has been released, and the short-term suppression factors have been lifted. As the leader of submarine cable, the company is expected to benefit from the development of Haifeng industry
As a scarce sea breeze leader, the company's four sectors drive long-term growth
Jiangsu Zhongtian Technology Co.Ltd(600522) started from optical fiber communication and strategically arranged the four businesses of ocean, new energy, power cable and optical communication, covering the two core tracks of new infrastructure and new energy. As the leader of sea breeze, the company now has the total integration ability of ocean system engineering integrating submarine cable observation, exploration, submarine cable laying and fan construction, which will deeply benefit from the development of sea breeze. Due to its product characteristics and special position in the industrial chain, the submarine cable has high industrial barriers, high barriers in production technology, production qualification, production equipment, customers, capital, geographical location and other aspects, and the market competition pattern is stable. In 2019, Jiangsu Zhongtian Technology Co.Ltd(600522) market accounted for the first, reaching 44%. The flexible and direct technology is leading in the country, in a leading position and has strong strength. With the transformation of submarine cable bidding of China's offshore wind power projects to the whole package mode of "manufacturing + laying", submarine cable enterprises with the whole package ability will be more competitive in the process of winning the bid, and the layout of the company's marine products is complete, which is expected to benefit the core in the future.
Sea breeze business: deep card position sea breeze track, China's leading submarine cable enterprise, benefiting from sea breeze, has great development potential
The company's marine business includes three parts: submarine cable, marine observation and marine engineering. Now it has the total integration ability of marine system engineering integrating submarine cable observation, exploration, submarine cable laying and wind turbine construction. Among them, submarine cable business is mainly used in offshore wind power, oil exploration and island transmission, and offshore wind power dominates the whole business part. China's offshore wind power is expected to maintain its development after the rush to load tide. Under the background of the accelerated development of global offshore wind, China's offshore wind industry is expected to further drive the business growth of this sector with the support of policy and supply and demand, as well as the promotion of cost reduction and parity driven by the large-scale wind turbine.
Since 1999, the company has developed and produced submarine optical cables and entered the marine system. After years of layout and development, it has formed a leading enterprise in China's submarine cable industry with complete product lines, deep cultivation in Guangdong and Jiangsu market and leading high-voltage and flexible direct technology, and actively expanded to deep-sea, DC and high-voltage submarine cable business; The construction of "two types and three ships" was completed in early 2019, forming the EPC capacity of offshore wind power projects. "Two types and three ships" include two 600t jack up platforms (Zhongtian 7 and Zhongtian 8) and a 1600t full swing crane ship (Zhongtian 9), and independently built a 6000t electric rotary table submarine cable laying ship (Zhongtian 5).
Products: the submarine cable product line is rich and complete, including submarine cable, submarine optical cable, deep-sea optical cable with relay system, submarine optical cable without relay system, dynamic armored umbilical cable, etc., covering almost all voltage levels.
Industrial layout: actively expand on the basis of Nantong submarine cable manufacturing base, establish Nanhai submarine cable manufacturing base in Shanwei, Guangdong, and make use of Lufeng's regional advantages to radiate the markets in eastern Guangdong and Southeast Asia. Jiangsu Dafeng submarine cable manufacturing base will be built in Dafeng, Yancheng, giving full play to the regional advantages of Yancheng, taking Dafeng port as the core and radiating from northern Jiangsu to Bohai Bay. Take advantage of localization to consolidate the offshore wind power market in Guangdong and Jiangsu provinces.
In terms of technology, the layout should deal with 66kV power collection submarine cable of large-capacity generator set, flexible EHV DC submarine cable to solve the neck of large-capacity power transmission battery, three core 330kV EHV large-capacity transmission submarine cable, dynamic cable for deep-sea floating fan, aluminum core submarine cable to reduce the cost of grid connection line, light environmental protection non lead jacket structure submarine cable A number of new technologies and high-tech products such as deep-sea submarine cables that meet the use requirements of 2000 meters of water depth.
New energy business: lay out the subdivided fields of light, storage and foil, and outline a new growth curve
Since 2011, the company has entered the new energy industry and established six subsidiaries, namely Jiangsu Zhongtian Technology Co.Ltd(600522) Photovoltaic Technology Co., Ltd., Zhongtian photovoltaic materials Co., Ltd., Jiangsu Zhongtian Technology Co.Ltd(600522) Energy Storage Technology Co., Ltd., Zhongtian Technology fluorine film intelligent factory, Zhongtian emerging materials technology Co., Ltd. and Jiangsu electronic materials Co., Ltd., which are managed by Jiangsu Zhongtian's new energy industry group.
The company locates the subdivided fields of light, storage and foil, and takes "strengthening the integration of photovoltaic industry, expanding the advantages of energy storage industry and accelerating the layout of copper foil industry" as the development goal to deeply layout the new energy industry. At present, the photovoltaic industry has a complete photovoltaic power station product industry chain and service system; In terms of energy storage, the large-scale energy storage system is taken as the core, and the energy storage applications on the power grid side, user side and power supply side are launched, with a complete energy storage industry; The copper foil industry has made two-way efforts to lithium battery copper foil and standard copper foil, with rapid layout. The company has been selected into the global top 500 new energy enterprises for six consecutive years, and reached a new high in 2021, ranking 116th. With the gradual development of new energy business, it is expected to open a new growth curve of the company.
Optical communication and power sector: the optical business is gradually warming up, and the power sector welcomes new opportunities
Optical communication sector: the company started from optical fiber communication. After years of deep development, the company has become the leading enterprise in the field of optical fiber and optical cable in China. Benefiting from the construction and development of China's new infrastructure, the continuous coverage of 5g network, the construction of data center, and the integration of digital consumption and other applications with Gigabit broadband promoted by the state, the potential demand for optical fiber and cable is expected to gradually increase. Marked by the increase in the centralized procurement volume and price of ordinary optical cable products by China Mobile from 2021 to 2022, with the demand side growth brought by the development of 5g construction, "double Gigabit", data center and other new businesses outside China, the fundamentals of the optical fiber and cable industry are gradually warming up. As the head enterprise in this field, the company's optical communication business is expected to continue to benefit.
Power sector: the company has the most complete industrial chain advantages of transmission and distribution products in the industry, and actively participates in the construction of UHV power grid and smart grid. Under the national strategy of "carbon peaking and carbon neutralization", power grid investment has increased steadily and ushered in structural growth opportunities. The company actively responded to the national strategy of "carbon peaking and carbon neutralization", developed high-performance and high-tech transmission and distribution products around energy conservation, environmental protection, safety and reliability, provided system solutions for smart energy Internet of things, maintained a leading level in transmission product technology, and became a major supplier of important lines and key engineering projects. In the field of distribution network, with the rapid development of urban and rural network transformation, it has become a system integrator with power cable as the leader, coordinated development of transformers, accessories and other products, and integration of design and construction. The company has repeatedly won the bid for the UHV project of the State Grid, and the ordinary conductor, special conductor and OPGW remain in the lead. The market share of power cables, overhead insulated conductors and other products in the field of distribution network ranks in the forefront. It is expected to directly benefit from the development of national power transmission in the future.
Profit forecast and investment rating
The company's strategic layout includes four major businesses: Ocean, new energy, power cable and optical communication, covering two core tracks of new infrastructure and new energy. As the leader of sea breeze, the core will benefit from the long-term growth of offshore wind power industry. At the same time, the gradual development of new energy business is expected to open a new growth curve of the company. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 125 million yuan, 3.758 billion yuan and 4.318 billion yuan respectively, and the corresponding PE will be 422.10 times, 14.05 times and 12.23 times respectively, maintaining the "buy" rating.
Risk factors
The risk that the development of marine business is not as expected; Price fluctuation risk of raw materials; Covid-19 epidemic spread repeatedly
