Jiangsu Zhongtian Technology Co.Ltd(600522) (600522)
Event: Zhongtian offshore engineering, a wholly-owned subsidiary of the company, plans to jointly invest with Guangdong Xinjiang Goldwind Science And Technology Co.Ltd(002202) to establish Nanhai Offshore Engineering Co., Ltd., with a registered capital of 570 million yuan. Zhongtian offshore engineering accounts for 51% and Guangdong Xinjiang Goldwind Science And Technology Co.Ltd(002202) 49%.
Our comments are as follows:
1. Zhongtian offshore engineering, a wholly-owned subsidiary of Jiangsu Zhongtian Technology Co.Ltd(600522) , plans to establish a joint venture with Guangdong Xinjiang Goldwind Science And Technology Co.Ltd(002202) , which is mainly engaged in the contracting business of offshore wind power projects and undertake engineering services such as offshore wind power foundation construction, wind turbine installation and maintenance. It can be seen that the main business of the joint venture in the future will be offshore engineering and maintenance related to offshore wind turbines, demonstrating the layout and determination of the company to continue to strengthen offshore engineering capacity in the future.
2. Jiangsu Zhongtian Technology Co.Ltd(600522) since the completion of the construction of “two types and three ships” in early 2019, milestone progress has been made in the field of marine engineering equipment. At present, it has the ability of marine resources development and EPC general contracting service of offshore main works, and its comprehensive competitiveness is strong. This time, a joint venture was established with leading wind turbine enterprises to build a next-generation offshore wind power installation ship suitable for the future large-scale and far-reaching localization of wind turbines, which can operate in deep and distant seas and more challenging marine environment. We believe that the development trend of offshore wind projects in the future is the large-scale and far-reaching localization of wind turbines. The purpose of this cooperation is to build a high-end offshore wind power installation ship. In the future, we can undertake offshore projects of large-scale wind turbines & far-reaching offshore, which is expected to further improve the comprehensive competitiveness and sustainable profitability of the company’s offshore wind business.
3. Guangdong Jinfeng and Zhongtian Offshore Engineering jointly established Nanhai Offshore Engineering Co., Ltd. to jointly build a new generation of offshore wind power installation ship, which will further empower the high-quality development of offshore wind power and help achieve the goal of “double carbon”. The design lifting capacity of the installation ship is 1600 tons, with the capacity of self transporting and self lifting multiple sets of 12mw-20mw offshore wind turbines under the condition of 70m operating water depth. It is planned to be put into service in 2023. The installation ship will carry out matching design with the new generation of offshore wind turbine units, and based on the integration and innovation of offshore wind power engineering process and wind power product technology, provide a strong guarantee for the efficient construction of large offshore units in the future, and provide customers with a more refined overall solution.
4. Clarkson research data show that in October this year, China surpassed the UK for the first time to become the world’s first offshore wind power market, 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 whole industrial chain capacity of the company’s submarine cable & submarine cable laying & wind turbine construction will continue to enhance, not only to maintain China’s leading share, but also to improve the general contracting and service capacity for future sea competition.
Profit forecast and investment suggestions:
On the whole, the company focuses on communication + energy, 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. After the reversal of the industry, it is expected to enter a three-year boom upward cycle. 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 is expected to be fully released in the future. As a leader of submarine cable & Marine Engineering, the company is expected to fully benefit. We emphasize that the space and prosperity of offshore wind must stand in the dimension of the next 5-10 years, the prospect is huge, and pay attention to the company’s global layout and global market; 3) Under the background of ten years of deep cultivation of new energy and 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. It is estimated that the net profit attributable to the parent company in 21-23 years will be 320 million, 3.85 billion and 4.55 billion yuan, corresponding to 15.6 times PE in 22 years. Reiterate the “buy” rating!
Risk tips: 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, the project promotion progress is not as expected, the value reduction risk of high-end communication related assets still exists, and the impact of litigation on profits is uncertain
