\u3000\u30 Ping An Bank Co.Ltd(000001) 57 Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) )
Events
On March 14, the company held the second interim meeting of the sixth board of directors in 2022, and deliberated and adopted the proposal on general authorization to repurchase some H shares of the company.
Brief comment
The valuation of the company’s H shares was at the bottom, and the repurchase thickened EPS, boosting investor confidence
The board of directors of the company deliberated and approved the authorization plan for repurchase of H shares. The specific elements are as follows: in terms of the number of shares to be repurchased, it shall not exceed 10% of the total number of H shares issued by the company when such resolutions were adopted by the general meeting of shareholders; In terms of repurchase price, the repurchase price on the repurchase day cannot be equal to or higher than 105% of the average closing price on the stock exchange in the previous five trading days. The repurchased shares will be written off to increase earnings per share.
On March 14, 2022, the company’s H-share PE (TTM) was 4.27, at the bottom of history. In addition, from the perspective of profit distribution and dividend distribution, the company promises that the cumulative cash distribution profit in recent three years will not be less than 30% of the average annual distributable profit achieved in recent three years. Overall, the company’s share price is undervalued and its investment value is prominent.
The last time the company bought back H shares was in 2015. The company launched the repurchase plan again after seven years, indicating that the company is highly optimistic about its own operation and development prospects. In addition, under the current market environment and the background of undervalued company value, boost investors’ investment confidence in the company.
The performance of excavators, high-speed machines and overseas markets in the construction machinery sector deserves attention
Aerial work platform: the company’s high-altitude machine business has developed rapidly, and the product type spectrum and performance are in the first echelon of the industry. Most of the company’s customers are regional leading lessors, with wide market penetration and customer coverage. In 2021, the company began to cooperate with Hongxin Jianfa and began to contact overseas head lessors. In 2022, the revenue of high-end machinery is expected to nearly double.
Excavator: the company’s Excavator products also realize the coverage of the full spectrum. The new park was officially put into operation at the end of 2021, which greatly improves the competitiveness of products and helps the company obtain more market share. Considering that the company’s Excavator base is relatively low and the impact of industry prosperity is relatively limited, it is expected that the company’s Excavator revenue can continue to maintain rapid growth in 2022.
Overseas market: the proportion of overseas income of the company’s construction machinery is still low. It is actively expanding, building ground forces and airports. At present, it has completed the model construction in Indonesia and will continue to expand to the Middle East, Belarus and other places. The company sets 2022 as the first year overseas, and plans to have an overall overseas revenue of 10 billion yuan. At the end of the 14th five year plan, the overseas revenue accounts for more than 30%.
Actively distribute agricultural machinery and new building materials, diversify development and hedge the cyclical impact of construction machinery
Agricultural machinery + Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) : the company’s revenue in the first three quarters of 2021 has exceeded that of the whole year of 2020. It is expected that the revenue scale of agricultural machinery sector will reach a record high in 2021 and will become the second growth curve of the company in the future. The company is positioned as a medium and high-end agricultural machinery product. Relying on its R & D and capital advantages, the company leads the technical direction of the industry. At the same time, the layout of Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) is complementary to agricultural machinery. It is expected that the agricultural machinery and Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) sector are expected to impact the scale of 10 billion during the 14th Five Year Plan period.
New materials: since 2021, the company has started building new materials business in trillion market. In 2022, the new material factory will be fully laid out. It is planned to invest and build six factories, and several projects are under active negotiation. It is expected that small-scale income will be formed by the end of the year. The company has advanced technology in dry mixing mortar equipment and formula, and will actively explore new markets with the help of existing advantages.
Investment advice
It is estimated that from 2021 to 2023, the company’s operating revenue will be 65.077 billion yuan, 66.721 billion yuan and 74.746 billion yuan respectively, with a year-on-year increase of – 0.05%, + 2.53% and + 12.03% respectively; The net profit attributable to the parent company was 6.417 billion yuan, 6.760 billion yuan and 8.170 billion yuan respectively, with a year-on-year increase of – 11.87%, + 5.35% and + 20.86% respectively; According to the latest closing price of 6.79 yuan, the corresponding PE is 8.89, 8.44 and 6.98 times respectively, maintaining the “buy” rating.
Risk factors
The commencement of projects in China was less than expected, and the promotion of agricultural machinery and new materials business was less than expected.
