\u3000\u30 Ping An Bank Co.Ltd(000001) 57 Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) )
Event: on March 14, 2022, the company announced that it planned to repurchase H shares of the company.
Key investment points
The proposed repurchase of H shares of the company shows confidence and is expected to thicken EPS
According to the company’s announcement, in order to stabilize investors’ investment expectations, safeguard the interests of investors and enhance investors’ confidence in the company’s growth, the company plans to repurchase part of the company’s H shares, the number of which shall not exceed 10% of the total number of issued H shares, and the repurchase price shall not be equal to or higher than 105% of the average closing price on the stock exchange in the previous five trading days. This repurchase is expected to thicken the company’s earnings per share, stabilize investors’ expectations and interests, and convey growth confidence.
The static dividend yield of H shares has exceeded 7%, highlighting the value attribute
On July 6, 2020, the company announced Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) : shareholder return plan for the next three years (20202022), specifying that the company’s annual cash dividend from 2020 to 2022 will not be less than 0.317 yuan / share. Calculated according to the closing price of the day before the release of this report, the company’s A-share static dividend rate is higher than 4.7% and H-share static dividend rate is higher than 7.3%, which highlights the value attribute.
The issuance of special bonds was accelerated, and attention was paid to the opportunities of the construction machinery sector under the background of steady growth
On March 5, the government work report of the State Council pointed out that the annual economic growth target is about 5.5%. We should put steady growth in a more prominent position and moderately advance infrastructure investment. In 2022, it is planned to increase the amount of special bonds of local governments by 3.65 trillion yuan, and the amount of new special bonds has been issued in advance by 1.46 trillion yuan. The total amount of the two funds exceeds 5 trillion yuan, effectively stimulating investment in infrastructure and other aspects. This year, the issuance pace of special bonds has been significantly ahead and accelerated. According to China Securities News, in the first two months of 2022, a total of 877.5 billion yuan of new local government special bonds were issued across the country, accounting for more than 60% of the “early approval” quota. However, the issuance of new special bonds in 2021 began in March. We expect that the new special bonds will be mainly issued in the first half of this year.
Pay attention to the electric wave of the industry in the next five years, and the rhythm is expected to exceed market expectations
Electrification can reduce the life cycle cost of construction machinery, transfer the value in the operation stage to the manufacturing end, and improve the technical level of equipment and software, which is conducive to the expansion of market scale and profit margin of the industry. Based on the advantages of saving operating costs and policy support (e.g. prohibition of excessive emissions on the road, unlimited green card travel, tax reduction, etc.), the electrification penetration rate of construction machinery products represented by excavation machinery and concrete machinery is expected to achieve leapfrog development in the future.
Profit forecast and investment rating: we maintain the forecast of the company’s net profit attributable to the parent company from 2021 to 2023 of RMB 6.9/7/8 billion, and the corresponding PE of the current market value is 8.5/8.4/7.4x, maintaining the “buy” rating.
Risk tips: macroeconomic fluctuations; Industry cycle fluctuation; Industry competition intensifies; Risk of continuous rise in raw material prices
