\u3000\u3000 Jiangsu Zhongtian Technology Co.Ltd(600522) (600522)
Event: the company announced that it plans to establish a joint venture with Haili wind power, which is mainly used to undertake engineering services such as offshore wind power foundation construction and maintenance, of which Jiangsu Zhongtian Technology Co.Ltd(600522) invested 255 million yuan, accounting for 51% of the registered capital, and Haili wind power invested 245 million yuan, accounting for 49%.
Our comments are as follows:
1. The combination of strong and strong forces accelerates the layout of the offshore wind power market. Zhongtian is the leader of submarine cable and Haili wind power is the leader of wind power equipment parts. The establishment of the joint venture will continue to build a next-generation foundation large-scale construction ship with far-reaching Haihua and large-scale units, which has strong lifting capacity and wind wave resistance, and can be constructed in deep-water areas and under adverse weather conditions. This foreign investment will further enhance the company’s market competitiveness and sustainable profitability, in line with the company’s long-term planning and development strategy.
2. More diversified layout to lock in market opportunities in advance. After completing the construction of “two types and three ships” in 2019, the company has a strong general contracting capacity of offshore main works. After building a new generation of offshore wind power installation ship with leading wind turbine enterprise Xinjiang Goldwind Science And Technology Co.Ltd(002202) , the company will establish a joint venture with Haili wind power, a manufacturer of key wind power equipment, and the comprehensive competitiveness of the company will continue to enhance. We believe that the company’s layout of the offshore wind power market is not only limited to the improvement of submarine cable technology / products / production capacity, but also diversified to quickly improve the comprehensive ability of piling, hoisting and operation and maintenance, which is more conducive to locking market opportunities and laying the foundation for further expanding overseas markets in the future.
3. According to Clarkson’s research data, in October 2021, China surpassed the UK as the world’s largest offshore wind power market for the first time, with a total installed capacity of 10.48gw. According to incomplete statistics, during the “14th five year plan” period, China’s total offshore wind power planning exceeded 60GW, which will gradually enter the stage of large-scale construction, and the industry development has entered a fast lane. From the perspective of prolonging the time dimension and space dimension (global market), in the future, the ability of the whole industrial chain of submarine cable & submarine cable laying & wind turbine construction of the company will continue to enhance, not only to maintain China’s leading share, but also to improve the general contracting and service ability for future sea competition.
Profit forecast and investment suggestions:
On the whole, the company focuses on communication + energy, including optical communication, power transmission, marine business and new energy. Among them: 1) the supply-demand relationship of optical fiber and optical cable continues to improve, showing a continuous upward trend, and the performance elasticity of price rise is expected. As one of the leaders, the profitability of the business is expected to continue to grow upward; 2) With the joint efforts of the industrial chain, offshore wind power is expected to usher in affordable Internet access in the future. Under the dual carbon goal, the broad space of the industry in the future is expected to be fully released. As the leader of China’s submarine cable & Offshore Engineering, the company is expected to fully benefit. We emphasize that the space and prosperity of offshore wind must be based on the dimension of the next 5-10 years, and the prospect is very considerable, And pay attention to the global layout and global market of the company; 3) With ten years of deep cultivation of new energy and the background of high prosperity of the industry, the company’s energy storage + copper foil + photovoltaic is expected to usher in an all-round and rapid development opportunity; 4) The power business is highly competitive and is expected to fully benefit from the construction of new power system and the growth of power grid investment in the future, which is expected to show a stable and rapid growth trend. Considering the further improvement of the company’s offshore engineering capacity, the company’s estimated net profit for 21-23 years is adjusted to 123 million yuan, 3.85 billion yuan and 4.7 billion yuan (the original value is 4.55 billion yuan), corresponding to 15 times PE in 22 years, maintaining the “buy” rating!
Risk warning: the establishment and operation of the joint venture are not as expected, the upstream raw materials continue to maintain high prices, the industry technology development is not as expected, the production expansion progress is not as expected, and the project promotion progress is not as expected
