\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 496 Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) )
Grasp the integration of photovoltaic buildings and set up subsidiaries to help integrate resources
On March 17, 2022, the company announced the establishment of its subsidiary Seiko green carbon Solar Energy Technology Co., Ltd. in Shaoxing, Zhejiang Province, to grasp the development opportunities of the integrated photovoltaic building market under the policy support of the national “double carbon” development strategy and the “14th five year plan for building energy conservation and green building development” of the Ministry of housing and urban rural development. The subsidiary is controlled by Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , and shares are held by other subsidiaries, so as to effectively improve the resource coordination ability among subsidiaries of the company.
Focus on the construction of distributed photovoltaic power stations and enhance the differentiated competitive advantage of the main industry
Seiko green carbon subsidiary is specialized in distributed photovoltaic EPC business and is involved in the technical business in the field of Cecep Solar Energy Co.Ltd(000591) science and technology; Design of photovoltaic cells, modules and supports, photothermal system equipment; Sales of photovoltaic equipment and components, new energy and photovoltaic power generation integrated system. By creating a main body focusing on the construction of distributed photovoltaic power stations, the company is expected to accelerate the process of improving the layout of green building industry. In addition, the special establishment of subsidiaries is also conducive to the company’s integration of high-quality customer resources accumulated in the field of public buildings and industrial buildings, and polishing its experience and technology in the construction of distributed photovoltaic projects, so as to enhance the company’s differentiated competitive advantage in the main business of steel structure and create a second growth curve.
The new regulations on building energy efficiency are overweight, and green buildings are expected to continue to benefit
In October 2021, the Ministry of housing and urban rural development issued the general code for building energy conservation and renewable energy utilization, which put forward higher requirements for building energy conservation and emission reduction. The average design energy consumption level of new residential buildings and public buildings should be reduced by 30% and 20% respectively based on the energy-saving design standards implemented in 2016. Under the “double carbon” national policy, green building has become a “must choice” from “optional”. The company is deeply engaged in the field of green building, and the standard product system of prefabricated buildings such as schools, hospitals and offices, with the assembly rate up to 95%. Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) as a green building solution, it is highly in line with the development direction of carbon neutralization policy. The new regulations on building energy conservation will be enforced from April 1, 22. It is expected that after the implementation of the new regulations, It is expected to bring benefits to green buildings, and the company’s photovoltaic EPC business will continue to benefit.
Green building leader, optimistic about medium and long-term growth logic
We believe that while consolidating the main business of steel structure, the company continues to promote informatization and digital transformation. As a green building solution provider, the company is highly in line with the development direction of carbon neutralization policy. With the accelerated pace of the implementation of new building energy-saving regulations, the establishment of Seiko green carbon subsidiary is expected to fully benefit the photovoltaic EPC business. Relying on the advantages of customers and channel resources, construction qualification and capital, the company has a first mover advantage in developing construction photovoltaic business. We maintain the company’s net profit attributable to the parent company in 21-23 years to be RMB 690 / 870 / 1.1 billion. Referring to the current 22-year average PE of comparable companies to be 15.62 times, the company is approved to be given 16 times PE in 22 years, corresponding to the target price of RMB 6.88, and maintain the “buy” rating.
Risk warning: the establishment and expected benefits of subsidiaries are uncertain; The implementation of the new regulations on building energy conservation is less than expected; The promotion of prefabricated construction business is less than expected; The macroeconomic downturn exceeded expectations.
