\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 496 Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) )
Q1 had a good start and its performance grew faster than expected. The company predicts that the net profit attributable to the parent company will reach 165199 million yuan in 2022q1, with a same increase of 25% – 50% and a median value of 38%, exceeding the market expectation; The net profit attributable to the parent company after non deduction was 158190 million yuan, with an increase of 34% – 61% and a median of 48%. The growth rate of non deduction performance was significantly faster, highlighting the strong growth trend of the company’s main business. The outstanding performance of Q1 is expected to be mainly due to: 1) the demand of steel structure industry has continued to be good in recent years, and the company has full orders on hand. At the same time, the company has actively overcome the impact of Q1 epidemic, promoted the implementation of orders, and achieved rapid growth in the output value of main steel structure industry; 2) The performance base in the same period last year was low (the performance growth rate in 2021q1 was only 4%). Q1 has made a good start this year as a whole. In the follow-up, with the continuous effect of the company’s series of measures to improve quality and efficiency, the fluctuation of steel price tends to be gentle, the profitability is expected to be enhanced, and the annual performance is expected to maintain a rapid growth trend.
Photovoltaic building has outstanding advantages. A platform company was established to integrate resources and accelerate business development. The company has outstanding advantages in developing photovoltaic construction business: 1) in terms of technical capacity, the company has started to layout the integrated business of photovoltaic power station design, construction and operation since 2013, has a rich reserve of distributed photovoltaic technology, and has many solutions in photovoltaic building structural load, roof heat dissipation and waterproof, operation and maintenance, with outstanding Integrated Landing business capacity; 2) In terms of channel resources, the roof of industrial plant is large and flat, the industrial power consumption is large, and the electricity price is high. Therefore, the installed capacity of industrial building BIPV / bapv is large, the power generation is high, the economy is good, and the owners have high enthusiasm for installation. Nearly half of the orders of the company’s traditional main business come from the field of industrial construction every year, which can better meet the relevant needs, and the channel advantages are prominent. In the near future, the company plans to invest and set up a professional subsidiary Seiko green carbon solar energy technology as a distributed photovoltaic EPC business platform. The subsidiary will be controlled by the company, and shares will be held by Seiko industry, Meijian construction, Shanghai Jingrui and other companies controlled by its subordinates. It is expected to integrate advantageous resources, further accelerate the expansion of photovoltaic construction business and strengthen the growth momentum.
The development of green buildings is accelerated, and the company, as the leader of steel structure, is expected to continue to benefit. Recently, the Ministry of housing and urban rural development issued the notice on the development plan of building energy conservation and green buildings in the 14th five year plan, and continued to focus on promoting new green construction methods: in terms of steel structure, it is necessary to “vigorously develop steel structure buildings, encourage hospitals, schools and other public buildings to give priority to steel structure construction, and actively promote the construction of steel structure housing and rural housing”; In terms of photovoltaic buildings, the notice puts forward that “the installed capacity of Cecep Solar Energy Co.Ltd(000591) photovoltaic in new buildings in China is more than 50 million KW” during the 14th Five Year Plan period. At the same time, the national mandatory code “general code for building energy conservation and renewable energy utilization” which will be officially implemented on April 1 also puts forward that ” Cecep Solar Energy Co.Ltd(000591) system shall be installed in new buildings”. On the whole, driven by a series of policies, the development of green buildings is expected to speed up, among which steel structures and photovoltaic buildings are expected to show a high landscape. The company is a leader in steel structure in China, actively layout photovoltaic construction business, and is expected to continue to benefit from the growth of green building industry in the future.
Investment suggestion: we predict that the company’s net profit attributable to the parent company from 2021 to 2023 will be RMB 7.0/8.8/1.1 billion respectively, with a year-on-year increase of 7% / 26% / 25%, EPS will be RMB 0.35/0.44/0.55 respectively, CAGR will be 19% from 2020 to 2023, and the corresponding PE of the current stock price will be 13 / 10 / 8 times, maintaining the “buy” rating.
Risk tips: the risk of steel price fluctuation, the risk that the promotion of photovoltaic construction business is less than expected, the risk that the expansion of steel structure EPC business is less than expected, etc.
