\u3000\u3000 China Communications Construction Company Limited(601800) (601800)
China Communications Construction Company Limited(601800) is a central enterprise leader in infrastructure construction, the world’s largest design and construction company of ports, roads and bridges, the global leader in dredging industry, China’s largest international engineering contracting company and highway investor, and a leader in infrastructure construction, design and dredging industry. Since 2019, the company has been widely involved in municipal construction. The proportion of newly signed orders for municipal and road and bridge construction of the company is large, up to 53% and 28% respectively in the first three quarters of 2021. Key technologies such as infrastructure are leading in the world.
There is still huge space for infrastructure construction. Steady growth brings certainty of growth and new opportunities for development. China’s urbanization level is not high. For example, the mileage of Railways and subways per unit area is still low, and there is still a lot of space for infrastructure construction. In 2022, with steady growth, the investment direction of capital is in line with the company’s business, the company has sufficient orders, optimized cost management, especially the loose financing environment to ensure the determination of performance growth and asset optimization, and the development of the company ushers in an opportunity period.
The company’s asset structure is optimized and revitalized, the asset value is improved, and there is new space for field expansion. Municipal construction projects have high added value, high project quality, short construction + operation period of urban complex projects and high asset operation efficiency. Municipal construction accounted for more than 50% in the first three quarters of 2021. A significant increase in the proportion of urban complex development projects in the first half of 2021 will improve the future cash flow of assets and improve the quality of assets. The expansion of REITs and other financing channels revitalizes the stock assets, and the company has great flexibility in asset optimization. At present, the expansion and diversification of financing channels bring new opportunities for the revitalization of the stock assets of the company’s investment projects, accelerate the withdrawal of investment projects and cash flow recovery, and improve the efficiency of asset operation. The company’s investment stock assets account for a high proportion, reaching about 40%, accounting for the highest proportion among the assets of similar central enterprise construction companies, which brings high flexibility for asset revitalization and large room for asset value improvement. After years of R & D and operation, the company has accumulated a lot of technical reserves and resources. The market share of the company in the field of offshore wind power installation has reached about 60%, and expanding wind power operation and maintenance has brought new growth space.
Profit forecast and investment rating of the company: it is estimated that the net profit of the company from 2021 to 2023 will be 21.40 billion yuan, 23.879 billion yuan and 27.170 billion yuan respectively, and the corresponding EPS will be 1.30, 1.48 and 1.68 yuan. The corresponding PE values from 2021 to 2023 are 8, 7 and 6 times respectively. The company is optimistic about the development opportunities brought by stable growth. There is great room for asset value improvement and new growth brought by asset revitalization and optimization. It is rated as “strongly recommended” for the first time.
Risk tip: the rhythm of asset optimization and market vitality is less than expected, and the development of new business is less than expected.
