\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 970 Sinoma International Engineering Co.Ltd(600970) )
Event:
Sinoma International Engineering Co.Ltd(600970) released the 2021 annual report: the company achieved an operating revenue of 36.242 billion yuan, an increase of 18.68% over the same period of last year, and a net profit attributable to the parent company of 1.81 billion yuan, an increase of 18.99% over the same period of last year. Under the background of the continuous epidemic outside China, the revenue and profit have achieved stable growth.
Key investment points:
After the completion of M & A, the company's profits were thickened. In 2021, the revenue and net profit attributable to the parent company increased by 18.68% and 18.99% respectively year-on-year. During the reporting period, the company completed the merger and acquisition of three high-quality assets: Beijing Kaisheng, Nanjing Kaisheng and Sinoma mining, and the asset scale and profitability increased significantly. In 2021, benefiting from the gradual improvement of the global epidemic and the gradual recovery of the global economy, the company achieved a revenue of 36.242 billion yuan, a year-on-year increase of 18.86%, and a net profit attributable to the parent company of 1.81 billion yuan, a year-on-year increase of 18.99%. In terms of the company's orders, the total amount of newly signed contracts in 2021 was 50.979 billion yuan, an increase of 18% year-on-year. By the end of 2021, the company had effectively carried forward the contract amount of 56.6 billion yuan, and the contract amount in 2022 was guaranteed. In terms of business, as the main source of revenue of the company, the revenue of engineering business increased by 8.37% year-on-year, and the gross profit margin decreased by 0.84% compared with 2020.
The incentive plan has been approved by the SASAC. The company has stable operation and strong profitability. It is expected to meet the assessment target of 15.5% compound growth rate of net profit in the next three years. The company's 2021 restricted stock incentive plan (Draft) was approved by the SASAC and agreed to implement. According to the incentive plan, the grant price of restricted shares is 5.97 yuan / share, and the performance evaluation goal for the next three years is that the compound growth rate of net profit is no less than 15.5%. The net profit attributable to the parent company increased by 18.99% in 2021. From January to February 2022, the newly signed contract amount of the company was about 5.507 billion yuan. By the end of February, the outstanding contract amount of the company was 53.067 billion yuan and the contract amount in hand was about 99.795 billion yuan. The annual performance may continue to grow. The company's stable profitability is expected to meet the assessment target of 15.5% compound growth rate of net profit in the next three years.
Profit forecast and investment rating: the company operates steadily, the engineering business grows steadily, and the equipment manufacturing business and environmental protection business develop rapidly. We expect the company to realize net profit attributable to parent company of RMB 2.312 billion, RMB 2.696 billion and RMB 3.163 billion respectively from 2022 to 2024, corresponding to PE of 8.92x, 7.65x and 6.52x. Considering that the company has good development potential in carbon emission reduction, industrial intelligence and other fields and has leading premium value, the "buy" rating is maintained.
Risk tip: the growth of engineering business is less than expected; The development of equipment and environmental protection business is less than expected; The epidemic situation has repeatedly affected the company's overseas business; The exchange rate fluctuates greatly; There is uncertainty in the implementation progress of this issuance; The company has the risk of goodwill impairment.
