\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 522 Jiangsu Zhongtian Technology Co.Ltd(600522) )
Event: on March 10, 2022, the company released the announcement of main business data from January to February 2022. The company achieved a total operating revenue of about 6 billion yuan, an increase of about 17% year-on-year; The net profit attributable to the shareholders of the listed company was about 800 million yuan, with a year-on-year increase of about 300%.
Comments:
The performance exceeded expectations, and the submarine cable leader set sail
According to the company’s announcement, the company’s total operating revenue from January to February 2022 reached about 6 billion yuan, a year-on-year increase of about 17%; The net profit attributable to the parent company reached about 800 million yuan, with a year-on-year increase of about 300%. The results of this announcement exceeded the market expectations. We believe that as the leader of submarine cable, the company works together in four sectors, forms a growth curve with multiple businesses, has a wide market space, strong development certainty and broad growth space in the future.
As a scarce sea breeze leader, the company’s four sectors drive long-term growth
Jiangsu Zhongtian Technology Co.Ltd(600522) started from optical fiber communication and strategically laid out four businesses of ocean, new energy, power cable and optical communication, covering two core tracks of new infrastructure and new energy. As the leader of sea breeze, the company now has the total integration ability of ocean system engineering integrating submarine cable observation, exploration, submarine cable laying and wind turbine construction, which will deeply benefit from the development of sea breeze. Due to its product characteristics and special position in the industrial chain, submarine cable has high industrial barriers, high barriers in production technology, production qualification, production equipment, customers, capital, geographical location and other aspects, and the market competition pattern is stable. In 2019, Jiangsu Zhongtian Technology Co.Ltd(600522) city accounted for the first, reaching 44%. Flexible and direct technology is leading in the country, in a leading position and has strong strength. With the transformation of submarine cable bidding of China’s offshore wind power projects to the whole package mode of “manufacturing + laying”, submarine cable enterprises with the whole package ability will be more competitive in the process of winning the bid, and the layout of the company’s marine products is complete, which is expected to benefit the core in the future.
New energy business: lay out the subdivided fields of light, storage and foil, and outline a new growth curve
Since 2011, the company has entered the new energy industry and established Jiangsu Zhongtian Technology Co.Ltd(600522) Photovoltaic Technology Co., Ltd., Zhongtian photovoltaic materials Co., Ltd. Jiangsu Zhongtian Technology Co.Ltd(600522) Energy Storage Technology Co., Ltd., Zhongtian Technology fluorine film intelligent factory, Zhongtian emerging materials technology Co., Ltd. and Jiangsu electronic materials Co., Ltd., which are managed by Jiangsu Zhongtian’s new energy industry group.
The company locates the subdivided fields of light, storage and foil, and takes “strengthening the integration of photovoltaic industry, expanding the advantages of energy storage industry and accelerating the layout of copper foil industry” as the development goal to deeply layout the new energy industry. At present, the photovoltaic industry has a complete photovoltaic power station product industry chain and service system; In terms of energy storage, the large-scale energy storage system is taken as the core, and the energy storage applications on the power grid side, user side and power supply side are launched, with 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, and reached a new high in 2021, ranking 116th. With the gradual development of new energy business, it is expected to open a new growth curve of the company.
Optical communication and power sector: the optical business is gradually warming up, and the power sector welcomes new opportunities
Optical communication sector: the company started from optical fiber communication. After years of deep development, the company has become the leading enterprise in the field of optical fiber and optical cable in China. Benefiting from the construction and development of China’s new infrastructure, the continuous coverage of 5g network, the construction of data center, and the integration of digital consumption and other applications with Gigabit broadband promoted by the state, the potential demand for optical fiber and cable is expected to gradually increase. Marked by the increase in the centralized procurement volume and price of ordinary optical cable products by China Mobile from 2021 to 2022, with the demand side growth brought by the development of 5g construction, “double Gigabit”, data center and other new businesses outside China, the fundamentals of the optical fiber and cable industry are gradually warming up. As the head enterprise in this field, the company’s optical communication business is expected to continue to benefit.
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 strategy of “carbon peaking and carbon neutralization”, power grid investment has increased steadily and ushered in structural growth opportunities. The company actively responded to the national strategy of “carbon peaking and carbon neutralization”, developed high-performance and high-tech transmission and distribution products around energy conservation, environmental protection, safety and reliability, provided system solutions for smart energy Internet of things, maintained a leading level in transmission product technology, and became a major supplier of important lines and key engineering projects. In the field of distribution network, with the rapid development of urban and rural network transformation, it has become a system integrator with power cable as the leader, coordinated development of transformers, accessories and other products, and integration of design and construction. The company has repeatedly won the bid for the UHV project of the State Grid, and the ordinary conductor, special conductor and OPGW remain in the lead. The market share of power cables, overhead insulated conductors and other products in the field of distribution network ranks in the forefront. It is expected to directly benefit from the development of national power transmission in the future.
With the provision of large impairment, the risk of high-end communication business is fully released, and the growth of light equipment can be expected
According to the performance forecast of the company on January 26, 2022, the median net profit attributable to the parent company in 2021 is expected to be 125 million yuan, a year-on-year decrease of 94.5%; It is estimated that the median net profit attributable to the parent company after deducting non-profit is 60 million yuan, a year-on-year decrease of 97.1%. This performance reduction of the company is mainly due to the abnormal execution of some contracts related to high-end communication business, and the provision of large impairment losses for accounts receivable, other accounts receivable and inventory related to high-end communication business, which has an impact on the company’s net profit attributable to shareholders of Listed Companies in 2021 of -3023214500 yuan, After accrual, the book value of high-end communication business related assets is 15600 yuan. We believe that the risk of high-end communication business has been released, and the short-term suppression factors have been lifted. As the leader of submarine cable, the company is expected to benefit from the development of Haifeng industry.
Profit forecast and investment rating
The company’s strategic layout includes four major businesses: Ocean, new energy, power cable and optical communication, covering two core tracks of new infrastructure and new energy. As the leader of sea breeze, the core will benefit from the long-term growth of offshore wind power industry. At the same time, the gradual development of new energy business is expected to open a new growth curve of the company. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 125 million yuan, 3.758 billion yuan and 4.318 billion yuan respectively. The current closing price corresponding to PE is 472.03 times, 15.71 times and 13.67 times respectively, maintaining the “buy” rating.
Risk factors
The risk that the development of marine business is not as expected; Price fluctuation risk of raw materials; Covid-19 epidemic spread repeatedly
