\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 406 Nari Technology Co.Ltd(600406) )
Events
Nari Technology Co.Ltd(600406) released the 2021 performance express, and the growth was in line with expectations
The performance express shows that the operating revenue of the company in 2021 is expected to be 42.411 billion yuan, a year-on-year increase of + 10.15%; The net profit attributable to the parent company is expected to be 5.642 billion yuan, a year-on-year increase of + 16.29%; The net profit deducted from non parent company was 5.529 billion yuan, a year-on-year increase of + 19.25%. Q4 in a single quarter, the company is expected to realize a net profit attributable to the parent company of 2.449 billion yuan, a year-on-year increase of + 6.34%; The net profit deducted from non parent company was 2.409 billion yuan, a year-on-year increase of + 8.46%.
Brief comment
In 2021, the decline of power grid investment stopped and picked up, and the 14th five year plan made steady growth
Previously, the State Grid has announced a power grid investment plan of 473 billion yuan in 2021, a year-on-year increase of 2.7%. In 2022, the State Grid plans to invest 501.2 billion yuan in power grid, with a year-on-year increase of 6%, reaching a new high. The “1.4 billion yuan investment plan” of Nanwang has been announced. We expect the total investment of the two power grids in the 14th five year plan to be more than 3.3 trillion, an increase of 15% – 20% compared with the 13th five year plan.
The construction of new power system has been started, and the investment focus is highly consistent with the company’s business direction
The investment focus of the new power system includes UHV, new generation dispatching system, intelligent information of power grid, domestic core relay protection system, load monitoring system, energy storage (pumped storage and electrochemical energy storage), etc. It is highly consistent with the company’s power grid automation and industrial control, relay protection and flexible transmission, power automation information communication, power generation and water conservancy and environmental protection.
The material bidding of State Grid in 2022 has been started, and a new round of power grid investment cycle will start
Since this year, the State Grid has successively completed the feasibility study and design bidding of UHV AC and DC projects from Longdong to Shandong, Zhumadian to Wuhan, Sichuan and Chongqing. It is expected that 2-3 UHV DC lines will be approved this year and the bidding of corresponding materials will be started. At least 5-6 UHV DC lines are expected to be approved later. Under the background of accelerating the construction of new power system, DC converter valve, dispatching system, relay protection and other products will help to improve the company’s gross profit margin and performance growth.
Equity incentive scheme demonstrates the confidence of the company
At the end of last year, the company issued the second equity incentive plan. During the period from 2022 to 2025, the compound annual growth rate of net profit relative to 2020 shall not be less than 10%. We believe that under such operating volume of the company, this goal demonstrates the management’s confidence in the company.
Give the company a “buy” rating
We expect that the net profit attributable to the parent company from 2021 to 2023 will be 5.642 billion yuan, 6.624 billion yuan and 7.907 billion yuan, with PE of 29, 25 and 21 times respectively, giving a “buy” rating.
Risk tips
The investment in power grid is less than expected; Intensified market competition; UHV approval progress is less than expected.
