Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) (002443)
Key investment points
Focus on pipeline products and fully cover oil, gas and water pipes
The company is one of the most complete pipeline manufacturers for oil, gas and water transmission in China, which can meet the application of customers in various regions and regions. Oil, gas and water transportation products include spiral seam submerged arc welded pipe, longitudinal seam submerged arc welded pipe, longitudinal seam high-frequency resistance welded pipe and large-diameter rolled longitudinal seam submerged arc welded steel pipe. Galvanized pipe is widely used in urban gas low-pressure courtyard pipe network and household pipes.
The variety continues to be optimized, and the production capacity is expected to expand again
The company develops high-quality pipes and Fittings Based on traditional products. At present, the welded steel pipe project with an annual output of 100000 tons for super large diameter urban water diversion project has been completed, 30000 tons of high-quality thin-walled stainless steel pipes and fittings are under construction, and the current progress has reached 80%. The high-quality welded pipe project with an annual output of 600000 tons has been started. After the construction is completed, 630000 tons of high-quality pipes will be brought to the company, Promote continuous optimization of product structure.
Restart steady growth and benefit from renewed efforts in infrastructure construction
The Central Economic Commission clearly put forward that infrastructure investment should be carried out moderately in advance, especially to speed up the aging, renewal and transformation of urban pipelines. It has been more than ten years since the last large-scale urban infrastructure construction in China, some gas and water supply and drainage facilities have entered the aging stage, safety accidents and urban waterlogging problems have begun to appear, and the renewal and transformation of urban pipelines is imminent. In addition, in the context of low-carbon emission reduction, as a clean energy, the total consumption of natural gas is expected to continue to grow, and the demand for gas transportation pipelines will increase widely in the future. The company's downstream demand is expected to carry out a new business cycle.
Profit forecast and valuation
As one of the leading enterprises in the pipeline industry, the company is expected to enter a new business cycle in the process of steady economic growth, infrastructure development and urban pipe network upgrading. We expect that from 2021 to 2023, the company's operating revenue will be RMB 63.37/68.82/7.091 billion respectively, with a year-on-year increase of 24.01%, 8.60% and 3.03% respectively; The net profit attributable to the parent company was 405 / 592 / 694 million yuan respectively, with a year-on-year increase of - 30.73%, 46.37% and 17.12% respectively, corresponding to EPS of 0.78 yuan, 1.14 yuan and 1.33 yuan respectively, and corresponding PE of 9.91/6.77/5.78 times respectively. The market value corresponding to the valuation of 10 times P / E ratio in 2022 is about 6 billion, which has 50% room for increase compared with the current market value, and is rated as "buy".
Risk tip: macroeconomic risk, sharp rise in raw material prices, lower than expected release of downstream demand, etc.
