Jiangsu Zhongtian Technology Co.Ltd(600522) (600522)
Event: on December 15, 2021, Jiangsu Zhongtian Technology Co.Ltd(600522) wholly-owned subsidiary Jiangsu Zhongtian Technology Co.Ltd(600522) group Offshore Engineering Co., Ltd. planned to establish Nanhai Offshore Engineering Co., Ltd. with Guangdong Xinjiang Goldwind Science And Technology Co.Ltd(002202) Co., Ltd. to engage in offshore wind power engineering contracting business and undertake offshore wind power foundation construction, wind turbine installation, maintenance and other engineering services. The registered capital of the joint venture was 570 million yuan, and Zhongtian offshore engineering contributed 51%, Guangdong Xinjiang Goldwind Science And Technology Co.Ltd(002202) contributed 49%.
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The combination of the two leading enterprises in Haifeng industry is expected to strengthen the industrial chain coverage and overall competitiveness
Zhongtian ocean’s business is mainly focused on the submarine cable side, and has the total integration ability of submarine cable submarine observation, exploration submarine cable laying and fan construction; Xinjiang Goldwind Science And Technology Co.Ltd(002202) its business focuses on the operation of wind turbines and wind power. It is the first wind turbine manufacturer to develop the technical route of medium speed permanent magnet in China, realizing the dual technical route layout of “direct drive permanent magnet + medium speed permanent magnet” to meet the differentiated needs of downstream. As a joint venture of two leading enterprises in the offshore wind industry, its business includes offshore wind power engineering contracting business, offshore wind power foundation construction, wind turbine installation, maintenance and other engineering services, so as 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. The joint venture is expected to combine the two industrial and technological advantages to further cover the Haifeng industrial chain, enhance the overall market competitiveness, further enhance the market competitiveness and profitability of Zhongtian, and continue to consolidate the leading position of Zhongtian Haifeng.
The landing of the joint venture in Guangdong will help further consolidate the Haifeng market
After the parity policy, Guangdong Province issued the implementation plan for promoting the orderly development of offshore wind power and the sustainable development of related industries in June 2021. Firstly, it proposed that the provincial subsidy relay the national subsidy to promote the smooth transition parity of offshore wind projects. At the same time, Guangdong Province is the largest Province in the 14th five year plan for offshore wind power, and proposed to realize the installed capacity of offshore wind power of 18 million KW by 2025.
In terms of industrial layout, Zhongtian has established the South China sea submarine cable manufacturing base in Shanwei, Guangdong, made use of Lufeng’s regional advantages to radiate the markets in eastern Guangdong and Southeast Asia, prepared to build Jiangsu Dafeng submarine cable manufacturing base in Dafeng, Yancheng, gave full play to the regional advantages of Yancheng, took Dafeng port as the core, radiated North Jiangsu to Bohai Bay, made full use of localization advantages, and consolidated Guangdong Offshore wind power market in Jiangsu Province. The South China Sea offshore project, a joint venture with Goldwind, landed in Yangjiang, Guangdong. As the only company with submarine cable capacity in Guangdong, it is expected to further consolidate the Guangdong market.
As a leading enterprise of China’s submarine cable industry, Haifeng track with deep card position has great development potential
The company’s marine business includes three parts: submarine cable, marine observation and marine engineering. Now it has the total integration ability of submarine cable submarine observation, exploration submarine cable laying and wind turbine construction. Among them, submarine cable business is mainly used in offshore wind power, oil exploration and island transmission, and offshore wind power is dominant in the whole business part. China’s offshore wind power is expected to maintain development after the rush to load tide. Under the background of the accelerated development of global offshore wind, China’s offshore wind industry is expected to further drive the business growth of this sector with the support of policy and supply and demand, as well as the promotion of cost reduction and parity driven by the large-scale wind turbine.
At present, the company’s submarine cable business is mainly undertaken by its subsidiary Jiangsu Zhongtian Technology Co.Ltd(600522) submarine cable Co., Ltd. Since 1999, the company has developed and produced submarine optical cables and entered the marine system. After years of layout and development, it has formed a leading enterprise in China’s submarine cable industry with complete product lines, deep cultivation in Guangdong and Jiangsu market and leading high-voltage and flexible direct technology, and actively expanded to deep-sea, DC and high-voltage submarine cable business.
Products: the submarine cable product line is rich and complete, including submarine cable, submarine optical cable, deep-sea optical cable with relay system, submarine optical cable without relay system, dynamic armored umbilical cable, etc., covering almost all voltage levels.
In terms of technology, the layout should deal with 66kV power collection submarine cable for large-capacity generator units, flexible EHV DC submarine cable to solve the neck of large-capacity power transmission battery, three core 330kV EHV high-capacity transmission submarine cable, dynamic cable for deep-sea floating fan, aluminum core submarine cable to reduce the cost of grid connection line, light environmental protection non lead jacket structure submarine cable A number of new technologies and high-tech products such as deep-sea submarine cables that meet the use requirements of 2000 meters of water depth.
The company completed the construction of “two types and three ships” in early 2019, forming the EPC capacity of offshore wind power projects. “Two types and three ships” include two 600t jack up platforms (Zhongtian 7 and Zhongtian 8) and a 1600t full swing crane ship (Zhongtian 9), and independently built a 6000t electric rotary table submarine cable laying ship (Zhongtian 5).
The optical business is gradually warming up, and the new energy + power sector welcomes new opportunities
In terms of optical communication, the company started from optical fiber communication. After years of deep cultivation and development, it has become the leading enterprise in the field of optical fiber and cable in China. The centralized acquisition and landing of mobile ordinary cables and the “simultaneous rise of volume and price” release the warming signal of optical fiber and cable, which will drive the optical communication business to an upward turning point; In the power sector, the company has the most complete industrial chain advantages of transmission and distribution products in the industry, and actively participates in the construction of UHV power grid and smart grid. Under the national “carbon peak and carbon neutralization” strategy, the power grid investment has increased steadily and ushered in structural growth opportunities; In terms of new energy, the company positioned the subdivided fields of light, storage and foil, and deeply laid out the new energy industry with the development goal of “strengthening the integration of photovoltaic industry, expanding the advantages of energy storage industry and accelerating the layout of copper foil industry”. At present, the photovoltaic industry has a complete photovoltaic power station product industry chain and service system; In terms of energy storage, it takes the large-scale energy storage system as the core, focuses on the energy storage applications on the power grid side, user side and power supply side, and has a complete energy storage industry; The copper foil industry has made two-way efforts to lithium battery copper foil and standard copper foil, with rapid layout. The company has been selected into the global top 500 new energy enterprises for six consecutive years. In 2021, it reached a new high and ranked 116th.
Profit forecast and investment rating
The company’s strategic layout includes four businesses: Ocean, new energy, power cable and optical communication, covering two core tracks of new infrastructure and new energy. As the leader of sea wind, the core will benefit from the long-term growth of the offshore wind power industry. At the same time, the gradual development of new energy business is expected to open a new growth curve for the company. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 319 million yuan, 3.929 billion yuan and 4.505 billion yuan respectively, corresponding to 174.24 times, 14.13 times and 12.33 times of PE, maintaining the “buy” rating.
risk factor
The risk that the development of marine business is not as expected, the risk of price fluctuation of raw materials, the risk of impairment of high-end communication related assets, and the risk of repeated spread of covid-19 epidemic
