Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) (600496)
Cost pressure relief superimposed with capacity release support, profits are expected to rebound at the bottom
Looking forward to 22 years, with the stabilization and decline of steel prices, the pressure on the raw material side is expected to be relieved. The transformation of EPC business is expected to gradually transform the company’s profit point from the traditional construction link to the whole industrial chain of project planning management, technology integration ability and procurement management. The prosperity of the superimposed prefabricated construction sector is rebounded, and the company’s profit level is expected to turn upward. In January, the company announced that it planned to invest 450 million yuan to build a new fabricated steel structure base, with an additional production capacity of 400000 square meters. In March, the company again announced that it planned to add 200000 tons of steel structure production capacity in Anhui production base. In addition, the company’s Jiangsu production base is expected to add 150000 tons of steel structure production capacity, and the continuous and steady expansion of production capacity matches the release of new demand.
Green building solutions are highly in line with the development direction of carbon neutralization policy
Under the “double carbon” national policy, green buildings have become “mandatory” from “optional”. The company has deeply cultivated the field of green buildings, prefabricated building standard product systems such as schools, hospitals and offices, with an assembly rate of up to 95%. The Zijin quasi dry scientific research house of Zhejiang university completed in 2020 has been certified as a three-star green building as a prefabricated building demonstration project of the Ministry of construction, The prefabrication rate of the project is 85%, and the assembly rate is as high as 96.8%. In addition, for the carbon reduction and environmental protection of traditional industrial buildings, senying window industry Shuangcheng phase II plant project is the largest passive plant project in the world, and the heating energy consumption can be saved by more than 70%. Seiko, as a green building solution, is highly in line with the development direction of carbon neutralization policy.
The advantages of roof resources and technology are leading, and the integration of photovoltaic buildings has broad development space
In 2009, Seiko incorporated the original Shanghai Electric Group Company Limited(601727) team and established Shanghai Lvzhu solar energy company. In 2011, the company raised funds through IPO to invest in photovoltaic integration projects, laying a good foundation for entering the BIPV market. In 2020, Seiko new energy reached cooperation with central enterprises such as Three Gorges construction and CDB NEW energy, From a three-dimensional perspective, the company’s advantages in developing photovoltaic buildings: 1) rich customer resource channels: referring to the company’s industrial construction revenue of 5.7 billion and public construction revenue of 1.7 billion in 2020, it can be equivalent to tens of millions of square meters of construction area; 2) Construction related qualifications: enterprises undertaking distributed photovoltaic power generation projects need to have general contracting qualification for power engineering construction, Seiko has class II general contracting qualification for power engineering construction, and can undertake projects independently; 3) Capital advantage: cooperate with central enterprises, or sell the completed power station to central enterprises, so as to reduce the capital pressure of the company, and have more financing channels with the financing platform of listed companies. As of 2021h1, Seiko new energy has achieved a revenue of 440 million and a net profit of 45.9 million. In many fields, such as energy-saving transformation, green power sales and distribution network business, it is expected to create a second growth curve.
Green building leader, optimistic about medium and long-term growth logic
We believe that while consolidating its main business, the company continues to promote informatization and digital transformation. As a green building solution, the company is highly in line with the development direction of carbon neutralization policy. With the advantages of customers, channel resources, construction qualification and capital, the company has the first mover advantage in developing construction photovoltaic industry. We maintain the company’s net profit attributable to the parent company of RMB 700 / 870 / 1.1 billion in 21-23 years, Referring to the current comparable company’s 22-year average PE of 16.58 times, the company is approved to give the company 16 times PE in 22 years, and the corresponding target price is raised from 5.95 yuan to 6.88 yuan to maintain the “buy” rating.
Risk tips: the macroeconomic downturn exceeded expectations, the promotion of prefabricated construction business was less than expected, the execution of orders on hand did not meet expectations, recent stock price changes, etc
