China Energy Engineering Corporation Limited(601868) (601868)
On December 27, 2021, China Energy Engineering Corporation Limited(601868) public disclosure: the wholly-owned subsidiary China energy construction green building materials Co., Ltd. (hereinafter referred to as “China energy construction green building materials”) is planned to be listed in the 14th five year plan During this period, it invested 60 billion yuan in the business field of green building materials to build a green sandstone group in the whole industrial chain. By 2025, it is expected to achieve annual revenue and total annual profit of more than 18 billion yuan and 3.6 billion yuan respectively, becoming a leading sandstone aggregate enterprise in China.
Key investment points
Anchor the new strategy, play the role of platform and lead the layout of green building materials industry
The new management of the company clearly put forward the overall development strategy of “1466” at the end of 2020 and made every effort to build a “six first-class” business model, including “first-class suppliers of building materials, industrial products and equipment”. On October 11, 2021, China energy construction green building materials was incorporated in Wuhan, Hubei Province, mainly engaged in mine investment, industrial park operation and derivative product processing and sales. As the company’s professional building materials investment platform, CNEC green building materials has a high level and fast decision-making. It is expected to take the lead in the market, give full play to the role of investment driving and traction, guide relevant enterprises of the company to participate in project investment and construction in an orderly manner, make efforts to develop green mine intelligent construction, green building materials products and advanced production technology, and build a high-tech enterprise in the building materials industry.
Clear the business plan of sand and gravel aggregate, and it is planned to realize the total annual profit of RMB 1.6/3.6 billion in 23 / 25 years
According to the publicly disclosed information, the company’s guidance on the development of gravel aggregate business clearly puts forward the development plan of gravel aggregate business: 1) by 23 years, the investment in green building materials business will reach 40 billion yuan, the annual revenue will exceed 8 billion yuan, and the total annual profit will exceed 1.6 billion yuan. Take the Yangtze River economic belt, Guangdong Hong Kong Macao Dawan district and Chengdu Chongqing economic circle as key areas to integrate and optimize the gravel aggregate industry and build the gravel aggregate industry into a new engine for the group’s economic growth; 2) By 25 years, the cumulative investment in green building materials business reached 60 billion yuan, with an annual revenue of more than 18 billion yuan and a total annual profit of more than 3.6 billion yuan. Actively promote asset and capital securitization, establish sand and gravel aggregate industry fund, build a green sand and gravel group integrating the whole industrial chain of sand and gravel aggregate investment, mining, processing, storage and transportation, derivative economy, prefabricated construction, park operation and mine management, and become a leading sand and gravel aggregate enterprise in China. We believe that bigger and stronger green building materials business is expected to thicken the company’s performance.
The “investment and construction” of new energy has achieved initial results, and a hydrogen energy company has been established to highlight the determination to promote the new strategy
The company issued the action plan for China Energy Engineering Corporation Limited(601868) practicing the “30.60” strategic goal (white paper) in June 21, focusing on the “one center” of the “3060” system solution and the “two basic points” of hydrogen energy and energy storage Carry out business transformation and propose to hold the installed capacity of new energy by 25 years and strive to exceed 20GW. From January to September, the company has signed several new energy investment strategic agreements, and the transformation of new energy investment and operation is expected to speed up; On November 27, 2001, the company announced that it planned to invest 5 billion yuan to establish a wholly-owned subsidiary, China energy construction Hydrogen Energy Development Co., Ltd., whose business scope covers hydrogen energy production and marketing, investment and construction, equipment R & D, hydrogen fuel cell, storage and transportation and other businesses. It is expected to lead the development of the company’s hydrogen energy business and expand and strengthen the hydrogen energy industry. Focusing on the new strategy, the company quickly promoted new energy investment and construction orders, established a hydrogen energy subsidiary, disclosed the development plan of sand and gravel aggregate business, and highlighted the responsibility of central enterprises.
Profit forecast and valuation
It is estimated that the company’s operating revenue from 2021 to 2023 will be 303.1 billion yuan, 345.5 billion yuan and 391 billion yuan, with a year-on-year increase of 12.11%, 14.02% and 13.17%. The net profit attributable to the parent company from 2021 to 2023 will be 6.767 billion yuan, 9.603 billion yuan and 10.991 billion yuan, with a year-on-year increase of 44.89%, 41.91% and 14.46%, corresponding to EPS of 0.16, 0.23 and 0.26 yuan. The current price corresponding to PE is 17.5, 12.3 and 10.8 times. Maintain the “overweight” rating.
Risk tip: the business development of green building materials and gravel aggregate is not as expected.
