\u3000\u3 Shengda Resources Co.Ltd(000603) 606 Ningbo Orient Wires & Cables Co.Ltd(603606) )
Event: the company released the annual report of 2021. In 2021, the operating revenue was 7.932 billion yuan, a year-on-year increase of 57%, and the net profit attributable to the parent company was 1.189 billion yuan, a year-on-year increase of 33.98%; In 2021q4, the operating revenue was 2.159 billion yuan, a year-on-year increase of 41.10%, and the net profit attributable to the parent company was 227 million yuan, a year-on-year decrease of 17.03%; It is proposed to distribute a cash dividend of 0.35 yuan per share (including tax).
Submarine cable and marine engineering business maintained rapid development. After rush loading, the gross profit margin of submarine cable business decreased, but it is still relatively high. The three business segments of the company maintained a good development momentum in 2021. The operating revenue of land cable system increased by 46.02% to 3.841 billion yuan year-on-year, and the gross profit margin decreased slightly by 2.6 PCT to 9.49%; The operating revenue of submarine cable system increased by 50.21% to 3.273 billion yuan year on year, and the gross profit margin decreased by 9.82 PCT to 43.90%, but it is still at a high level of more than 40%; The operating income of offshore engineering increased by + 253.53% year-on-year to 809 million yuan, and the gross profit margin increased by 1.59 PCT to 25.14%.
The bidding price of sea wind turbines continued to decline, and the installed scale of sea wind turbines is expected to exceed expectations during the 14th Five Year Plan period. Recently, the bidding price of China’s sea breeze has continued to decline. Under the background of large-scale and domestic substitution, the cost of wind turbines has continued to decline. After the rush of sea breeze, the installation cost will gradually return to rationality, and the process of sea breeze parity is expected to accelerate; On the other hand, under the background of “carbon neutrality”, the coastal provinces have increased their support for the development of sea breeze. According to our statistics, the total installed capacity of sea breeze planned by the provinces in the 14th five year plan is nearly 60GW; In the future, if the national level continues to strengthen the development and approval of projects in sea areas under state control, we believe that the new installed capacity of offshore wind power in China is expected to exceed expectations during the 14th Five Year Plan period.
The company has obvious advantages in technology, experience and products, and continues to take orders to ensure long-term development. Thanks to its leading technical strength, excellent past performance experience and differentiated product advantages, the company has successively won three projects in China in recent two months, including Mingyang Yangjiang Qingzhou IV (with a bid winning amount of 1.39 billion yuan), CGN Xiangshan tuci (with a bid winning amount of 240 million yuan) and Yuedian Yangjiang Qingzhou 12 (with a bid winning amount of about 1.7 billion yuan), It also successfully won the bid with boskalis for TenneT’s hkwb European offshore wind power EPC project (the bid winning amount is about 530 million yuan), further opening up the European high-voltage submarine cable market. The company has maintained a strong trend of taking orders and will provide a strong guarantee for the rapid growth of performance in the future.
Maintain the “buy” rating. According to the company’s submarine cable capacity expansion plan and the judgment on the installed scale of Haifeng, we expect the company to realize a net profit attributable to the parent company of RMB 1.354/18.502218 billion in 22-24 years, corresponding to eps1.5 billion 97 / 2.69/3.23 yuan. The current share price corresponds to 30 / 22 / 18 times of PE in 22-24 years. In the future, the application scale and laying difficulty of ultra-high voltage AC cables (330kV and above), flexible and direct cables and corresponding products will continue to increase. The company has industry-leading technical strength and manufacturing and application experience of similar products. It is expected to ensure market share and obtain excess profits by virtue of differentiated products and maintain the “buy” rating.
Risk tip: the price of raw materials fluctuates, the release of production capacity is less than expected, and the policy leads to the slowdown of offshore wind power investment.
