Securities code: 601727 securities abbreviation: Shanghai Electric Group Company Limited(601727) No.: pro 2021-105
Shanghai Electric Group Company Limited(601727)
Announcement on the reply of Shanghai Stock Exchange to the information disclosure supervision letter of the company’s third quarter report in 2021
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Shanghai Electric Group Company Limited(601727) (hereinafter referred to as “the company” or ” Shanghai Electric Group Company Limited(601727) “) has recently received the working letter on the supervision of information disclosure of the third quarter report of Shanghai Electric Group Company Limited(601727) 2021 (szgh [2021] No. 2944) (hereinafter referred to as “the working letter of the third quarter report”) issued by Shanghai Stock Exchange. The company has carefully checked and analyzed the issues concerned in the working letter of the third quarterly report, and made a written reply to Shanghai Stock Exchange. Now the reply contents of the working letter are announced as follows:
1. The third quarterly report disclosed that during the reporting period, the company realized an operating revenue of 30.831 billion yuan, a year-on-year increase of 5.78%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was – 240 million yuan, which turned negative year-on-year; The sales expenses incurred were 3.691 billion yuan, a year-on-year increase of 38.78%.
The company is requested to: (1) supplement and disclose the revenue, net profit, gross profit margin and year-on-year changes of each business segment in the third quarter in combination with the industry competition pattern, the composition of the company’s main business, the product cost and selling price of each business segment; (2) Combined with the composition and year-on-year change of sales expenses, quantitatively analyze the main reasons for the change; (3) Combined with the development of the industry, the business performance of Companies in the same industry and their own business characteristics, supplementary disclosure of the reasons and rationality of the loss after non deduction in the third quarter; (4) Explain whether relevant influencing factors will continue to have an adverse impact on the company’s performance and countermeasures, and fully prompt risks.
Company reply:
(1) Combined with the industry competition pattern, the composition of the company’s main business, the product cost and selling price of each business segment, supplementary disclosure of the revenue, net profit, gross profit margin and year-on-year changes of each business segment in the third quarter
The operating revenue, profit distribution, gross profit margin and year-on-year changes of the three business segments of the company in the third quarter of 2021 are shown in the table below:
RMB billion
2021 2021 2021 2021
The third quarter of 2021 compared with the third quarter of 2021
The business segment’s business in the third quarter was lower than that in the same three quarters of the previous year, and the third quarter was lower than that in the same period of the previous year
Increase or decrease in profit of the Revenue Department during the period and increase or decrease in gross profit
Dynamic amplitude (%)
(%)
Energy equipment 133.7532.73% – 3.47-310.37% 16.36% (up 0.41)
Percentage points
Industrial equipment 114.1810.93% 5.837.46% 16.33% (down 1.02)
Percentage points
Integration services 75.10-28.38% – 1.20-0.9% 8.70% (down 1.03)
Percentage points
Other and offsets -14.72/////
Total: 308.315.77% 13.5720.63% 16.64%, up 1.1%
Percentage points
Note: tabular data are unaudited.
1) Energy equipment sector
In the third quarter of 2021, the gross profit margin of the company’s energy equipment sector was 16.36%, an increase of 0.4 percentage points over the previous year. The gross profit margin of main businesses in the sector is as follows:
July September 2021 July September 2020
Coal fired power generation equipment 12.23% 18.31%
Wind power equipment 16.67% 12.54%
For the coal-fired power generation equipment business, from the perspective of the industry, the power industry where the company is located shows a diversified trend, and China’s power supply structure is developing towards a cleaner and low-carbon direction. Affected by the national energy policy, the coal power industry has been in a recession. During the 13th Five Year Plan period, the average annual growth rate of China’s coal power installed capacity was only 3.7%, accounting for the total installed capacity
The proportion of volume decreased from 59% at the end of 2015 to 49.1% at the end of 2020. According to the research on China’s “14th five year plan” power planning released by the “global new energy Internet development cooperation organization”, the proportion of coal-fired power installed capacity will further decrease to 37.3% in 2025. After reaching the peak of 1.1 billion kw in 2025, the total installed capacity of coal-fired power will decrease to about 400 million kW in 2050, and gradually change to regulatory power supply. From the perspective of industrial chain, the prices of main raw materials required for the production of coal-fired power equipment, such as steel and copper, have increased significantly in recent years. The price of raw material market is expected to continue to rise in the future, which has a great impact on procurement costs. At the same time, with the shrinking of the coal power market, enterprises often carry out fierce quotation competition to compete for market orders, which also leads to the general decline of the gross profit margin of enterprises.
The gross profit margin of relevant segments of Companies in the same industry is as follows:
Company name: January June 2021 January June 2020
Dongfang Electric Corporation Limited(600875) – clean and efficient energy equipment 10.10% 48.80%
Harbin electric thermal power main equipment 7.43% 8.52%
Note: Dongfang Electric Corporation Limited(600875) . Harbin Electric has no quarterly segment report data, and semi annual data is selected here.
For the wind power equipment business, the development of onshore wind power in 2021 generally exceeded the expectations at the beginning of the year, with intensive release of competitive distribution projects and a large number of base projects. The market space and capacity of onshore wind power are sufficient, and the bidding of offshore wind power is reopened after the market cooling off period. At the same time, the competition for complete machines will be fierce in 2021. The company’s holding subsidiary Shanghai Electric Group Company Limited(601727) Wind Power Group Co., Ltd. (hereinafter referred to as ” Shanghai Electric Wind Power Group Co.Ltd(688660) “) engaged in wind power equipment business will continue to implement the development path of “cost leadership under technology leadership”, improve management efficiency, continue to build the business pattern of “one body and two wings” and explore new profit growth points. Affected by industrial policies, the company’s wind power business has sufficient orders on hand. In the future, the revenue and profit of these orders will be improved. After the rush loading tide, the new hoisting capacity on land and at sea is expected to fall back and gradually return to the level before the rush loading tide. The new orders of wind power business will be affected to a certain extent, which will decrease compared with the rush loading tide. However, with the emergence of new demand growth points in the industry, the medium and long-term development trend of the industry is good. With the brand and customer relationship accumulated over the years, The company is expected to continue to obtain new orders. The execution or delivery of these new orders and orders in hand will provide strong support for the revenue of wind power business. With the optimization of product cost and scale advantages, the profitability of wind power business is expected to be guaranteed. In the third quarter of 2021, under the rush of loading, the proportion of our offshore wind power business in the wind power business increased, and the gross profit margin of the wind power business increased.
The gross profit margin of Companies in the same industry is as follows:
Company name July September 2021 July September 2020
Xinjiang Goldwind Science And Technology Co.Ltd(002202) 24.34%17.11%
Ming Yang Smart Energy Group Limited(601615) 21.32%19.89%
Zhejiang Windey Co.Ltd(300772) 6.83%13.26%
2) Industrial equipment sector
In the third quarter of 2021, the gross profit margin of the company’s industrial equipment sector was 16.33%, a decrease of 1.0 percentage points over the previous year. The gross profit margin of main businesses in the sector is as follows:
July September 2021 July September 2020
Elevator 16.00% 16.93%
Industrial basic parts 21.64% 21.74%
For the elevator business, its product demand mainly comes from residential, business office buildings and public facilities. In recent years, for the real estate industry, the CBRC has strengthened the investigation of the illegal inflow of bank financial funds into real estate. The central bank’s “three red lines for real estate enterprise financing” limited the high debt of real estate enterprises, resulting in the continuous tightening of the capital chain of developers. With the sustained development of the national economy, the slowdown of the high-speed operation of the real estate industry and the promotion of urbanization, China’s elevator industry has entered a mature stage. There are more than 700 complete machine manufacturers in China’s elevator industry, with a production capacity of more than 1.4 million units, and there is a serious overcapacity, Competitive environment and fierce competition in elevator industry in 2021; (2) The centralization trend of the real estate market continues, and the hand-held orders of major customers continue to rise; (3) Accounts receivable and cash flow are under pressure. The company’s elevator business will aim to maintain market share and continue to maintain its leading position in the industry with comprehensive advantages such as price, technology and quality. The market competition of elevator business in this period is fierce, and the gross profit margin decreases due to the influence of real estate industry policies and market.
The gross profit margin of Companies in the same industry is as follows:
Company name July September 2021 July September 2020
Guangzhou Guangri Stock Co.Ltd(600894) 11.43%16.36%
Lack of, which brings uncertainty to the automotive fastener business and commercial aeroengine blade business. Some automotive fastener orders are passively delayed due to the shortage of host manufacturers’ chips. Although facing many short-term difficulties, the medium and long-term development trend of industrial basic parts industry, as the basis of manufacturing industry, remains unchanged. With the implementation effect of the government’s counter cyclical policy and the expected decline of the impact of the epidemic in the future, the industrial infrastructure industry will gradually return to the growth track. At the same time, the technology blockade against China caused by trade friction has also increased the state’s investment in core independent technologies and industries. The urgency of replacing imports of domestic key parts will be further improved, and the industrial basic parts industry will usher in a new period of development opportunities. The gross profit margin of industrial basic parts in this period is basically the same as that in the same period last year.
3) Integrated services
In the third quarter of 2021, the gross profit margin of the company’s integrated service sector was 8.70%, a decrease of 1.0 percentage points over the previous year. The gross profit margin of main businesses in the sector is as follows:
July September 2021 July September 2020
Energy engineering and services 1.96% 8.96%
Environmental protection engineering and services 22.82% 12.80%
Energy engineering and service business contributed the most to the revenue of integrated services, and its gross profit margin decreased mainly due to the long construction cycle of energy engineering projects, generally seriously affected by the epidemic, delayed on-site progress, increased procurement costs, anti epidemic investment and other factors. At the same time, from the perspective of the industry environment, the demand scale of the global coal power market has decreased and the market competition is fierce. At present, it is leading in coal power engineering industry
