\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 970 Sinoma International Engineering Co.Ltd(600970) )
Event: the company released the annual report of 2021. During the reporting period, the company achieved an operating income of 36.2 billion yuan, an increase of 18.7% over the adjusted income in 2020; The net profit attributable to the parent company was 1.81 billion yuan, an increase of 19.0% over the adjusted net profit; The net profit after deducting non net profit was 1.3 billion yuan, an increase of 51.6% compared with the adjusted net profit after deducting non net profit. Note: in Q4 of 2021, the company acquired the shares of Beijing Kaisheng, Nanjing Kaisheng and Sinoma mining under the controlling shareholder by issuing shares and cash payment. The company plans to distribute a cash dividend of 0.23 yuan per share (including tax) to all shareholders.
Comments:
China’s newly signed single eye is optimistic about the green transformation of domestic cement production line: the newly signed orders of the company in 2021 totaled 43.9 billion yuan, an increase of 18% at the same time. Among them, 24.6 billion yuan was newly signed in China, an increase of 40.7% at the same time; New orders signed abroad amounted to 19.3 billion yuan, up 8% year-on-year. Due to the large differences in energy consumption level and carbon emission of cement production lines in China, there is great potential for energy conservation and carbon reduction transformation and upgrading. For overseas business, with the weakening of the impact of the epidemic in Africa, Southeast Asia and other places, the owners’ willingness to invest in new construction gradually recovers; In Europe, technological transformation projects are relatively active, such as alternative fuels, burning transformation, etc. Among the sub business segments, the newly signed orders for equipment manufacturing, cement production line operation and maintenance and mine operation and maintenance performed well in 2021, with the newly signed contract amount of 4.8 billion yuan, 6.4 billion yuan and 5.6 billion yuan respectively, an increase of 16%, 24% and 20% respectively.
The overseas localization operation is deepened, and the synergy effect with the group is obvious: the company has 36 overseas localization companies overseas, and the proportion of localized employment exceeds 60%. In 21 years, the newly signed overseas territorial diversification project orders were 4 billion yuan, an increase of 43% at the same time; The operating income was 3 billion yuan, an increase of 98% at the same time. The synergy effect with the group is remarkable, and the projects of battery diaphragm in Vietnam and calcium silicate board in Nigeria have been put into operation successively; Nigeria aggregate project, Thailand gypsum board, Brazil wind power blade project and other investment projects are about to be implemented. The company has a complete overseas marketing system and will be the vanguard of China building materials towards internationalization.
The cost of anti epidemic is still high, which has a phased impact on Profitability: during the reporting period, the company’s comprehensive gross profit margin was 17%, with an increase of 0.44pct; The improvement of comprehensive gross profit margin is affected by the optimization of business structure. In 2021, the gross profit margin of the company’s engineering construction business was 13.4%, with a decrease of 0.84pct. The main business of the project is mainly affected by the anti epidemic expenditure. The cost of anti epidemic expenditure in the reporting period is about 670 million yuan, an increase of about 34% at the same time, accounting for about 2% of the total cost of the company. The gross profit margin of equipment manufacturing, environmental protection and production operation management increased by 2.27pct, 5.4pct and 3.3pct respectively year-on-year, mainly due to 1) the improvement of operation efficiency under the reform of management system and incentive mechanism; 2) Sinoma mining and other businesses have better profitability.
Profit forecast, valuation and rating: the company’s domestic business has accelerated and benefited from the green transformation of cement production line; With the weakening impact of overseas epidemic, overseas business is expected to accelerate the recovery. Benefiting from the reform of state-owned enterprises, the company has optimized its management system, diversified incentive means and significantly improved its operation efficiency; The profitability of the engineering business decreased due to the impact of anti epidemic cost expenditure. We are optimistic about the steady growth of the company’s main engineering industry and the steady progress of diversified business. After the completion of asset acquisition, the net profit forecast for 20222023 will be raised to 2.145 billion yuan (up 20%), 2.456 billion yuan (up 20%), and the net profit forecast for 2024 will be increased by 2.911 billion yuan. Maintain the “buy” rating.
Risk tip: the recovery of overseas demand is less than expected, the transformation of domestic production line is less than expected, and the impact of the epidemic.
