China Communications Construction Company Limited(601800) (601800)
The world’s leading comprehensive infrastructure service leader, leading overseas and investment businesses. The company is the world’s leading comprehensive service enterprise for transportation infrastructure, with the advantages of integrated services for the whole industrial chain of investment, design, construction and operation and maintenance. It is the world’s largest design and construction company for ports, roads and bridges and the world’s largest dredging company; China’s largest international engineering contracting company and China’s largest Expressway investor. The main business features are as follows: 1) taking transportation infrastructure as the core, it occupies a leading advantage in the fields of port, dredging, offshore engineering, road and bridge construction, etc. 2) the “one belt, one road” leader has earned nearly 100 billion overseas business and has been ranked first in Asia for 14 consecutive years. 3) With rich experience in investment projects, it took the lead in exploration in the industry in 2007. As of June 21, its Expressway and other intangible assets ranked first among central construction enterprises.
REITs project declaration and construction of infrastructure asset management platform have great potential. The company announced that its application for infrastructure REITs pilot project of Jiatong expressway has been accepted. At present, the company has put into operation 24 expressways, with a total investment of 183.8 billion yuan. The resources of potential projects that can be applied for later are rich. The breaking of REITs is of great significance to the company: in the short term, for a single REITs project, the company can obtain investment income in the current period, recover funds in advance and reduce the asset liability ratio. In the long run, after the REITs market is mature and stable, the company will continue to revitalize the stock assets, build a complete closed-loop operation mode of “investment construction withdrawal investment”, optimize the management of its Expressway and other assets by relying on the professional investment and operation ability of the infrastructure market, and fully enlarge the value of infrastructure assets through investment, operation cultivation and trading, It has great potential to obtain additional investment income and build an infrastructure asset management platform.
Offshore wind power construction technology is leading, and the layout of the whole industry chain creates a new growth point. In 2020, the new installed capacity of offshore wind power in China exceeded 3gw, accounting for 50.45% of the new installed capacity in the world; The total capacity of offshore wind power is about 10GW, becoming the second offshore wind power market in the world, and the industry has entered a period of rapid development. It is estimated that the annual new installed capacity of offshore wind power in China will increase from 3gw to 8GW from 2020 to 2025, with a compound growth rate of 27.2%. With rich offshore operation experience and advanced heavy offshore equipment, the company occupies nearly 50% of the market share in the offshore wind power installation market and has a stable leading position. The company disclosed that during the 13th Five Year Plan period, it has conquered key technologies such as offshore wind turbine installation and equipment, wind power foundation construction and equipment, offshore wind farm maintenance, new wind power materials and durability, and is planning in an all-round way to extend to the front and back of the industrial chain, including complete machine manufacturing, wind power investment, wind power operation and maintenance, so as to build an industrial chain advantage of all-round development in the field of wind power, It is expected to create new growth points.
The valuation is at a historical low, and the improvement of stable growth expectation is expected to drive the valuation repair. In the past five years, the company’s PE (TTM) is 5.5-17.4 times and Pb (LF) is 0.41-2.0 times. At present, the company’s PE (TTM) is 5.9 times and Pb (LF) is 0.56 times, which is still in the lowest range in history. At present, there is great downward pressure on the economy and the expectation of steady growth of infrastructure. As a leader in infrastructure, the company’s valuation is expected to be repaired.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2021 to 2023 will be 218 / 245 / 27 billion yuan respectively, with a year-on-year increase of 34.6% / 12.2% / 10.2%, EPS of 1.35/1.51/1.67 yuan respectively, and the corresponding PE of the current stock price is 5.7/5.1/4.6 times respectively, giving a “buy” rating.
Risk tip: the strength of steady growth policy is lower than expected, the epidemic risk is repeated, the project progress does not meet the expected risk, and the progress of new business does not meet the expected risk.
